ADVICE page

Willie McVey, our advisor, will from time to time give advice on pension topics.

Final Salary Pension Schemes

There is a lot of talk concerning these types of pension schemes in the press just now. I want to give you a few notes on your scheme.

All of the STV Pensions Association pensioner members are receiving benefits from a final salary pension scheme (the new employees of STV are in a money purchase scheme). The members and the company put contributions into a fund and a guaranteed percentage of your final salary is paid out as a pension based on salary and service.

The fund has to grow to help keep contributions down. Unfortunately for the last three years the fund has not grown due to the state of the stock market but pension schemes are long term and do not only look at the last 3 years. The STV scheme has taken measures to help protect the fund and the members.

You have a member nominated trustee Sam Robson - who will continue to look after the fund so there will be no immediate fears for the STV Pension Scheme. We will keep watching.

Inheritance Tax

At the Associations AGM in October 2002 a few members approached me on this important subject so here are a few notes.

The current inheritance tax limit is £250,000. if your estate is valued at over this limit _your estate will have to pay 40% on the balance.

For a husband and wife the family home passes to the survivor after the first person has died with no inheritance tax. The full estate value is then increased by the value of the house when the second person dies.

As house values have increased substantially in certain areas the estate could go over the limit very easily. There are a few things you can do to avoid these taxes so you must get independent advice on your own situation

Willie McVey is the Employee Benefits Director of Kingdom Asset Management Ltd who are a firm of Independent Financial Advisers regulated by the FSA.  (If you wish to talk to him concerning this matter please call him on 01294 271887 or 0771 8866 503)