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Time to take care of tax, ISAs and pensions

Simon Dickerson of Medical & Financial advises you to take care of your tax and pension affairs and make sure any spare capital goes into an ISA before the deadline is up.

Simon Dickerson of Medical & Financial advises you to take care of your tax and pension affairs and make sure any spare capital goes into an ISA before the deadline is up.

Another month and another set of bad economic indicators, the stock market has fallen even further since the last entry although showing some sign of recovery over the last couple of days.

The Bank of England is in the process of spending upward of £75billion of newly created money in order to "buy back" government gilts. This has the effect of pumping more money into the economy, historically a move that has led to very high inflation however with inflation so low currently and the bank of England unable to cut interest rates further this may well be a positive move.

Quantative easing as it is called really is a matter of last resort for the Bank of England, if that doesn't lift some of the gloom over the economy there isn't a tremendous amount open for them apart from to cross fingers and hope things improve.

So what does a financial consultant write about in such difficult times ? Well today a few reminders.

Time is nearly up on the old added years scheme. Any member who expressed an interest has until the end of the tax year to commence payments. This is only possible for those who have already contacted the NHS for a quote. The additional pension scheme is open for those other members, the schemes differ slightly, the new scheme is more expensive however is more flexible and will suit some people better.

APSS 200 forms must be with the Revenue before the beginning of the tax year. Following pension simplification rules brought into force in April 2006 members had 3 years to protect existing pension benefits from taxation. Any member retiring this year can have a pension fund from all sources of £1.7 million. We have come across an increasing number of GPs whose NHS pensions alone exceed this figure. Any excess pension has a penalty tax rate of either 55 or 65% so it is very important to get forms submitted as this charge can be avoided.

ISA investments must also be in before the end of the tax year. The current allowance is £7200 in this tax year. Even for the risk adverse there is a £3600 cash allowance. For any tax payer with capital it makes sense to fully utilise the allowances, there are some very low risk options available even on the stocks and shares component.

41221132Simon Dickerson, Medical & Financial Top 5 cash ISA rates

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