Fergus Muirhead answers your consumer questions
I'm Fergus Muirhead and I'm here to answer any questions you may have about any money or consumer issues.
Please drop me a line here at email@example.com with your questions.
You can also read more on money and consumer issues on my own blog.
I am e mailing in the hope that you can head me in the right direction with the following: I am 65 years of age and wish to re-mortgage my property. Unfortunately my present provider does not allow mortgages to continue past the age of 65 years. Can you point me in the direction of companies who would re-mortgage for people aged 65? Norma Coyle
There are several lenders who will allow you to borrow beyond the age of 65. They may want detailed account of your income and expenditure after your normal retirement age, including details of any company and personal pensions that you are entitled to, as well as the likely level of state pension that you can expect. A basic google search produced a list of lenders that, in general terms, were prepared to lend, but you might want to speak to a mortgage broker who will have access to the whole market. Go to www.unbiased.co.uk and start a search for a suitably qualified mortgage advisor.
I am going on holiday to Australia. What is the best way regarding finance - cash, credit card or debit card? Jim Lowrie
It might be that a combination is best. It's useful to have cash when you arrive somewhere, especially since you are travelling so far and you don't want to arrive with no cash, or be forced to exchange money at a poor rate. If you are using debit or credit cards, however, make sure you read the charges involved before you go away so that you don't get some nasty surprises on your return. Some cards will automatically add surcharges to each transaction and you want to avoid this where possible. Also make sure that your bank knows that you are going away since sometimes cards can be "stopped" if transactions are attempted from strange places.
I took early retirement in 2009 and I had to buy an annuity. Now that the rules have changed, will I be able to cancel this? At the moment if I die my pot will be lost, which I think is very unfair as most of my funds were in private pension schemes. Alex Munro
You are correct when you say that the rules on the purchase of annuities have changed. It used to be the case that you had to use the money that had built up in your pension fund to buy an annuity before you were 75 and it sounds as though this is what you have done. When you buy an annuity you are effectively "selling" your pension fund in return for an income that will be paid until you die, or until your spouse or dependents die, depending on how the annuity was set up in the first place.
So I'm afraid that the short answer is that you can't turn the clock back and have your fund again. One of the reasons that the rules were changed is that a lot of people thought the same as you, that the rules were unfair in the sense that if you died very soon after buying an annuity, your family could lose out. One way to avoid this, or at least lessen the blow, is to ask that the annuity you buy continues to be paid to a spouse or dependent after your death. This will reduce the initial level of income you are paid but may mean that the payment continues for longer.
This restriction has now been removed and it is possible to continue to draw an income from your pension fund until you die. Whether it is better to take this option is another matter. There are different tax rules that apply to your fund before it has been "vested". I don't like technical terms but this is the one that is used to signify that you have taken some cash or an income from your fund. There are also different rules applying before and after the age of 75 and at death, depending on whether your fund has been vested so you really need to think carefully about what it is that you want if you haven't yet purchased an annuity with your pension fund. You need to take advice on this - there are lots of options and you need to make sure that you are choosing the one that suits you best.
My wife and I are joint holders of a With Profits Bond with Liverpool Victoria which we purchased on 23 April 2002 for £10,000. At the end of the ninth year this was worth a miserable £13,095, but with market value reduction I would only have received £11,759 had I cashed it then. At the 10th anniversary I can receive full payment without any market value reduction. I am led to believe, however, that income tax will be payable on the profits portion of this bond. Is this correct? If so is there any way I can minimize such an outlay on what is after all a deplorable return. My wife does not pay tax and her portion of the profits will not put her over her allowance before tax but I pay tax at the standard rate. Craig Foley
First of all the Market Value Reduction is the way that insurers get their money back if you "cash-in" a with-profit bond early, and is the insurer's way of making sure that other investors are not penalised because you are removing your money in a time of poor investment returns. You need to read the terms and conditions very carefully when investing in this type of product since different companies apply these reductions in different ways. As far as tax is concerned you should only have a tax liability if the surrender of the bond takes you into a higher rate tax band. There is an assumption that the bond itself will have taken care on any "basic rate" tax liability you may have and if you are a basic rate taxpayer then you may have no more tax to pay.