1. IN2 Planning
4 May 2016

2. IN2: Who Are We?
IN2 is a financial advisory firm providing a full range of wealth management services, catering to a wide range of clients offering bespoke advice in each case.
IN2 have particular expertise in Limited Companies and owner run businesses.
IN2 was set up in 2000 by Phillip Cohen and Raul Renjel and now acts for over 500 clients with assets under advice in excess of over £100,000,000.

3. Pensions Why?

4. Life Expectancy UK
It is a reasonable assumption that your retirement will last at least two decades.
Life expectancy in the UK continues to rise.

5. The Lucky Ones?
The number of years to provide for in retirement has increased by approximately by 30% since 2002
There are more women than men aged 90 and over

6. The Really Lucky Ones?
The number of people aged 100 & over is…

7. Wealth Over Lifetime Age Education Spending other peoples money
Working Life
Accumulation/Savings
Retirement
De-accumulation/Spending
Age
0 y/o
25 y/o
65 y/o
100+
14% of people will retire with no pension provision and so are totally or heavily reliant on the state pension.
Source: Prudential

8. Will the Government Provide?

9. State Pensions in UK Old State Pension New State Pension
How it’s made up
2 Parts: basic pension + additional pension
1 Flat Rate Payment + any ‘protected payments’
Maximum Weekly Payout
£ basic (+ avg £40 additional)
£ any ‘protected payments’
NI Years Needed for Full Rate 30 35
NI Years to Qualify for Minimum Payment
Any 10
Yearly pension = £8,093.80
In the United Kingdom, the state will provide a pension to those over a certain age.
Usually at least 10 qualifying years on your National Insurance record to get any State Pension. 
35 qualifying years required to get the full new State Pension.
You’ll get a proportion of the new State Pension if you have between 10 and 35 qualifying years.
Example
You have 20 qualifying years on your National Insurance record after 6 April 2016.
You multiply 20 qualifying years by £4.45 (£ divided by 35).
Your new State Pension will be about £89 per week.

10. How Much do I Need?

11. Retiring at 65 Funds Required to Retire at Age 65
Amount of Income Needed Gross
Additional Income Required
Pension Fund Size Required
£20,000
£11,906.20
£390,745
£30,000
£21,906.20
£718,943
£40,000
£31,906.20
£1,047,135
£50,000
£41,906.20
£1,375,327
Single Life, RPI Linked 5 Year Guarantee
Source: Annuity rates from Best Buy tables from as at 3 May 2016.

12. What if I Work For Longer?

13. Retiring at 70 Funds Required to Retire at Age 70
Amount of Income Needed Gross
Additional Income Required
Pension Fund Size Required
£20,000
£11,906.20
£318,945
£30,000
£21,906.20
£586,826
£40,000
£31,906.20
£854,707
£50,000
£41,906.20
£1,122,588
Single Life, RPI Linked 5 Year Guarantee
Source: Annuity rates from Best Buy tables from as at 3 May 2016.

14. What Do Others Have?

15. Total Household Wealth including Pension, Housing and Physical
What Do Others Have?
Total Household Wealth including Pension, Housing and Physical
Source
£ bn %
Private Pension Wealth
4,786 47
Property Wealth (net)
3,375 33
Financial Wealth (net)
1,085 11
Physical Wealth
1,012 10
Total Wealth
10,257
100
Table 1 presents total household wealth as well as financial, pension, housing and physical wealth component parts from the 2008/10 Wealth and Assets Survey. Total personal wealth in the UK is £10.3trn. This is five times Gross Domestic Product. Of this total private pension wealth contributed £4.8trn, 47 per cent. Property wealth (net) accounted for 33 per cent of total wealth, financial wealth contributed 11 per cent, and physical wealth 10 per cent. Total non-private pension wealth is 53 per cent of total wealth and only slightly more than private pension wealth alone at 47 per cent.

16. What Can You Do?

17. Pension Options for Limited Companies
Direct
Company Pension
Corporation Tax Relief
Indirect
ABC Ltd
Salary
Pension
Income Tax Saving
Dividend
No Pension Contribution
No Income Tax Saving

18. Advantages of Pensions
Contributions
The annual allowance per person is £40,000.
Tax Relief
Individuals (for higher rate tax payers)
Pay in £80 and receive basic rate tax relief of £20 to total £100
Reclaim £20 back on Self Assessment tax, therefore overall cost is only £60
Company contributions
A company with taxable profits of £100,000 would normally pay Corporation tax at 20% - If they contribute £20,000 then there are only £80,000 of taxable profits
A Tax saving of £4,000 for the company taxed at 20%
In addition monies are now in Trust in the Directors’ names
3 January 2019

19. Advantages of a Pension
Tax
Investments within a pension are free of Income Tax and Capital Gains Tax
Pensions are usually set up as trusts, which keeps them separate from other assets for inheritance tax and capital gains tax purposes
Comparison of Investing into a Pension, Bank Account, Direct Shares and Property:
Pension
Bank Account
Direct Shares
Property
Tax relief on investment
Yes No
Income Tax
Capital Gains tax
3 January 2019

20. Annual Corporation Tax Saving
Advantages of a Pension
Tax – example investment
Assuming a company is making profits of £40,000 of net income per year invested for 25 years into a bank account (corporation tax applicable), direct investment (corporation tax applicable) and a pension plan (no corporation tax applicable).
Gross Profit
Net Investment
Annual Corporation Tax Saving
Bank Account
£40,000
£32,000 £0
Pension
£8,000
*Assuming Corporation Tax stays at 20%
3 January 2019

21. Growth rates for Corporate Investments
Net value of investment in 25 years time 4%
(3.2% after CT) 6%
(4.8% after CT) 8%
(6.4% after CT)
Bank Account
£1,223,174.02
£1,541,454.81
£1,966,011.97
Pension
(No CT applicable)
£1,713,765.16
£2,309,979.87
£3,170,087.98
Bank account growth rates
3.20% £1,223, % £1,541, % £1,966,011.97
Pension numbers
4.00% £1,713, % £2,309, % £3,170,087.98
Corporation Tax (CT) is due on bank deposits, so these growth rates over time will be lower

22. Discretionary Management
Advantages of a SIPP/SSAS
Investment Flexibility
The SIPP/SSAS “wrapper” gives the greatest flexibility of pensions
You decide exactly what makes up your SIPP/SSAS
Unlike most personal pensions, not limited to only a small choice of funds
SIPP/SSAS
Discretionary Management
Single company shares
Commercial Property
Regular pension
Pension fund
3 January 2019

23. Pension Advantages of a SIPP/SSAS Consolidating existing pensions
You may have a number of small pension pots from previous jobs
Be proactive and move them into one place where you have complete control
Seeking advice is strongly recommended.
Pension
Small pension
3 January 2019

24. Advantages of a SIPP/SSAS
Moving abroad?
Your pension assets can be transferred into overseas pensions should you decide to move abroad at a later date
QROPS or QNUP’s may be suitable.
Advice is strongly recommended.
3 January 2019

25. Using an Experienced Wealth Manager
For a pension to grow over time, expert investment advice is necessary.
Speak to a wealth manager to see how they might help you.
Portfolio Multi-Strategy 6
Portfolio Multi-Strategy 2
Graph shows illustrative performance of Arcrate’s model portfolios over time compared to reference indices

26. Disclaimer Please note:
The information contained in this presentation does not constitute specific advice
Care should be taken when considering switching pensions and advice should be taken
The information in this document is not intended as an offer or solicitation to buy or sell securities or any other investment or banking product, nor does it constitute a personal recommendation
Interested parties should seek advice from their Investment Adviser
Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors
Past performance is not a reliable indicator of future results
The value of investments, and the income from them can go down as well as up, and you may not recover the amount of your initial investment
Where an investment involves exposure to a foreign currency, changes in rates of exchange may cause the value of the investment, and the income from it, to go up or down
Tax treatment depends on an investor’s individual circumstances, and it may be subject to change

27. Mortgages

28. Mortgage Department
Dedicated mortgage department set up over 14 years ago.
Over £130 million of finance arranged.
Approaching £200 million worth of property.
Residential, Buy-to-Let & Commercial mortgages, Development finance, and Bridging loans.

29. UK Property Market
Average house price:(Halifax House Price Index March 2016 & Land Registry April 2016)
in UK £214,000
in London £534,785
Annual growth rate: (Halifax House Price Index March 2016 & Land Registry April 2016)
in UK 10.1%.
in London is 13.9%.

30. BTL Borrowing in 2015 £27.4 billion.(Nationwide BS April 2016)
UK Buy To Let Market
BTL Borrowing in 2015 £27.4 billion.(Nationwide BS April 2016)
BTL Borrowing in 2009 £8.9 billion. (Nationwide BS April 2016)
Buy to Let Capital Growth :(LendInvest Index Dec 2016)
Inner London 7.81%.
Metropolitan Area 4%
Rental yields in London averaged 5%.(LendInvest Dec 2015)

31. Contractors
Often find it difficult to arrange mortgage.
Our specialist knowledge of this market can ease the process.
We have well-established relationships with the right lenders.
Dedicated underwriting teams for large loans.

32. Foreign Nationals
They can find it extremely difficult to obtain mortgages.
We work with lenders that can be flexible.
Dedicated underwriting team for large loans

33. Other Areas of Finance
Commercial mortgages.
Development finance.
Bridging loans.
Secured loans on property already owned.
Equity Release
Available through relationships with specialist brokers and lenders in these areas.