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Independent financial advisers founded in 1975
Over £1.4 billion client funds under management
17 industry awards for advice since 1989

Pensions News

Pensions: Mind the April threat to independence

Tuesday, 25 February, 2014

By Alan Steel
Tuesday 25 February 2014

Published in Scott-Buzz

Two Januarys ago, on our annual search for a spell in the sun in Florida, the biggest worry of investors there was how the US was going to survive the collapse of Greece. Even in the Sunshine State Google searches for Double Dip recession were hitting records. What surprised the snowbirds was that Florida's ageing population was still contributing to a state GDP three times that of Greece.

This year, on a return visit, when I pointed out that not only did Greece survive, but the OECD also reckoned it was the third top country for growth over the last year, locals shook their heads in disbelief.

So much for the disappearing Euro - and the burning down of four fifths of the much belittled 'PIGS'.

[Incidentally Spain came first, Portugal second, with Italy fifth or seventh depending on how you calculate progress]

And then I spotted the "alternative" map of all 50 US states, where each state is replaced by a country whose GDP is similar in size. Even in America folk just don't get the sheer size of US GDP compared to everybody else. Nor do they appreciate how different the states stand in comparison to individual countries.

Taking 2012 figures, Florida is not only still three times larger economically than Greece but it's also roughly nine per cent bigger than Saudi Arabia - and almost 25 per cent bigger than Switzerland.

So about the most recent basket case ....Argentina? Florida is 60 per cent bigger and even New Jersey outdoes it in financial clout. What about Ireland? Well Oregon gives it a run for its money thanks in part to my purchases of its superb Pinot Noir.

But then I got to thinking.....where does Scotland fit in?

According to Wiki-thingy... Scotland's GDP, if you include a pro rata share of offshore activity in 2012, Scotland's GDP was around $220 billion! That puts it above 27 US states' GDP, and on a par with Connecticut. Not only is it ahead of Ireland economically, but it also thumps Pakistan, Czech Republic, and Kuwait. It's 25 per cent bigger than New Zealand and four times the GDP of Luxembourg and Bulgaria.

If that's not impressive enough, it's even equal to 85 per cent the size of Hong Kong!

Meanwhile, back in the nightly news asylum , while all eyes are on a day in September deciding our independence, few of us seem aware of a date in April which will have huge ramifications to those of us who care enough to save into pension plans to assist our own plans for future financial independence.

Since 2006 our UK Government and HMRC have broken promise after promise by chopping and changing our Legitimate Rights to Benefit from accumulated pension funds. They said in 2006 a lifetime limit will apply for five years and then be indexed. One year later they scrapped these promises.

In less than 2 months they will be breaking further promises, the upshot being a significant loss in tax free levels and a stealth tax in future of 55 per cent to the unwary.

I don't know who will win in September, but I do know how to win in April. And you should too.

Article courtesy of Scot-Buzz
Tuesday 25 February 2014

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