Investors should examine their expenditure and look to either caution or diversification, writes

pension plan will enjoy 20% tax relief, grossing up the contribution to £10,000. It is even better for high earners who can receive 40% tax relief, effectively reducing their personal contribution to a net £6000.

“Butthis is aspecialist area: not every insurance company has the technology to provide these new Flexible Drawdown plans. So speak to your Independent Financial Adviser.”

Contact Alan Wardrop, Dip PFS, ACIBS, Certs ( MR and ER) of Johnston Gray & Wardrop on 0141 226.3184 or e- mail aw@jgw.biz.

UK INTEREST rates have been at a record low level of 0.5% for four years and in that time, many cash savers have suffered from returns considerably below the rate of inflation, meaning they have been losing money in real terms.

“It has also been shown that many people’s personal rate of inflation is even greater than the official rates,” says Graeme Robertson of AWD Chase de Vere. “A personal rate of inflation looks at the expenditure related to an individual and it is usually the case that older people will spend a higher proportion of their money on items such as food and utilities, which tend to rise faster than inflation.

“The double whammy for older investors is that they are the people who are most often reliant on their savings

“Considering the CPI inflation rate of 2.8%, a taxed savings account for a basic rate taxpayer would need to exceed 3.5% gross per annum to provide a real return and for a higher rate taxpayer, the interest rate on their savings account would need to be greater than 4.67%. The overwhelming majority of savings accounts are paying much less than this.

“The ongoing dilemma for savers therefore is whether to accept that the spending power of their money is continuing to fall or take more risk in the hope of generating better returns. The most cautious investors should remain in cash, regularly reviewing their accounts to ensure they are earning competitive rates of interest.

“They should also use their annual cash ISA allowance, which for 2013/14 is £5760. Saving in a cash ISA ensures that all interest is tax free and doesn’t have to be declared on a tax return.

“Other investors should look at different options to try and generate higher levels of income or growth. The best strategy is usually to invest into a range of different asset classes such as equities, fixed interest and property, in proportions depending upon the circumstances, requirements and attitude to risk of the investor.

“This can be achieved by investing into a range of underlying investment funds such as Cazenove UK Opportunities, Rathbone Income, BlackRock European Dynamic, Henderson US Growth, First State Global Emerging Market Leaders, Fidelity Strategic Bond, Kames Strategic Bond and M&G Property Portfolio.

“This approach can provide investors with a good degree of diversification and the growth potential to beat inflation over the medium to long term.”

Contact Graeme Robertson at AWD Chase de Vere on 0141 354 7873. Big help for smaller firms AWD Chase de Vere has launched a flexible and cost effective service for small and medium-sized companies in Scotland who need help implementing pensions Auto Enrolment. Contact Graeme Robertson at AWD Chase de Vere on 0141 354 7873 or email Graeme.robertson@awdcdv.com. A useful medical alert BEFORE you retire it’s well worth taking time to consider the options that are available to help maximise your income. There are some significant differences between pension annuity providers and the income they will offer you. It’s also possible that you could qualify to receive a higher income if you are a smoker or have a medical or lifestyle condition. Go to www.reidscottross. co.uk/annuities/best-annuity-rates for more information, or contact Jacqui Johnston at Reid Scott & Ross on 0141 225 8500. Time to get it together IF YOUR financial assets, shares, pensions and trusts are held with many different organisations, a Wealth Platform solution will bring all your financial interests together in one easy-to-access place. Reid Scott & Ross’s Wealth Management platform is a simple and reliable way to have your pension and investments collated and updated securely in one place. Go to www. reidscottross.co.uk/wealth-platform for more information, or contact Jacqui Johnston at Reid Scott & Ross on 0141 225 8500. Take care of yourself WE KNOW the need to insure our most valuable possessions but are often less concerned with insuring ourselves. It’s a useful exercise to set up or review these contracts and ensure that they are both cost effective as well as suitable for your needs – when it comes to insurance, one size does not fit all. Go to www.reidscottross.co.uk/ insurance-protection for more information, or contact Jacqui Johnston at Reid Scott & Ross on 0141 225 8500. Where there’s a will ... WHEN it comes to Inheritance Tax (IHT) planning it is imperative that your financial planner and your solicitor are on the same page. If your IHT plan does not reflect your wishes in your will, it can lead to serious problems dealing with your estate. Contact Adrian Murphy, Partner, Murphy Financial on 0141 221 5353.