Month: November 2019

Planning a ski trip? Try somewhere a little unusual…

With so many different resorts out there, it’s easy to be so spoilt for choice that you just can’t decide where to go. But what if you want to try somewhere a little off the beaten track? Many skiers and snowboarders often opt for the most popular resorts, leading to inflated prices driven by demand. If you’re looking for a more unusual experience, keep reading… 

Mauna Kea: Hawaii 

With the snow season taking place between December and February each year, Mauna Kea offers a unique chance to glide along the slopes of Hawaii. The area is devoid of ski lifts, marked runs or ski-carved moguls. It’s an area for experts, as you’ll have to take an off-road vehicle on the roads between observatories on the 4,270 metre tall mountain. Although lacking in resort facilities, it’s a great example of how such comforts aren’t a necessity when it comes to alpine enjoyment! 

Ski Dubai: Dubai 

Moving on from a tropical island to the desert, Ski Dubai offers an all year round skiing experience at one of the world’s largest indoor ski areas. Ski Dubai houses five full ski runs, including the world’s first indoor black run and a freestyle zone. It’s the perfect opportunity for those who like to experience both climates while taking a holiday. 

Ben Lomond: Tasmania 

Ben Lomond allows skiers to experience snow in an area better known for its surfing and sandy beaches. Being located in the Southern Hemisphere, it means that it has a ski season between July and September, making it a great opportunity for those of you who want to head to cooler climates during the summer. 

Mount Etna: Italy

If the black diamond runs of Europe don’t quite scratch that itch, why not try carving some tracks along an active volcano? Mount Etna, based in Sicily, houses two ski areas in Provenzana and Nicolosi, both with accessible ski lifts. It has a longer snow season than most, running from November until April. The views from the summit of this mighty mountain are incredible, although skiing can occasionally be hindered by the odd bit of volcanic activity here and there. 

Monte Kaolino: Germany 

With our final entry, we’re doing away with snow entirely. Although it is still seasonal (April – October), Monte Kaolino gives skiers the unique opportunity to ski on beautiful, Quartz sand. There’s one lift to take you to the top of its flagship 200 metre run and it’s sure to provide a dazzling experience. You can even leave your thermal gear at home!

We hope you have enjoyed this break from our regular financial articles and that we’ve inspired you to try something a little more unusual for your next ski trip.

Back to 60 campaigners fight on…

The campaigning group, Back to 60, has lost their fight at the High Court to seek redress for the inequality around the state pension age, which affects women who were born in the 1950s.   

The group was claiming that the increase in the state pension age was discriminatory and put women at a severe disadvantage compared with men.       

As women in that age bracket were only told of the change shortly before they reached their 60th birthday, there was little opportunity for them to make alternative financial provision. The group stressed that this had completely destroyed the retirement plans of many women and had affected both their physical and mental well being. 

What exactly changed? 

Legislation in 1995, as part of the Pension Act, equalised the state pension age for men and women at 65. For women, this meant the pension age would rise by 5 years.  

In 2011, however, changes to the act would cause the women’s state pension age to increase more quickly to 65 between April 6 2016 and November 2018. In addition, from Dec 2018 the state pension age for men and women started to increase so that it will reach 66 by 2020.

Due to the 2011 changes, a woman born between April 6 1954 and May 5 1954 has to wait an extra 18 months to receive her pension. The amendments are thought to have affected 3.8 million people. 

The legal challenges 

The Back to 60 group was calling for a full restitution of pensions going back to the age of 60 for women affected. As Joanne Welch, their campaign director, pointed out, “1950s women mainly stayed at home, had part-time jobs, looked after children, the elderly. Their income was supplemented by the main breadwinner – the man.”

It is worth pointing out that the Back to 60 campaign is not seeking the same outcome as the group known as WASPI (Women Against State Pension Inequality), which has been campaigning for a transitional arrangement for 1950s’ born women, in the form of a bridging pension. This would meet the gap between the original state pension age and the new one. It would also compensate women who had already reached State Pension age and lost out They are not, however, asking for the State Pension Age to revert to 60. 

What does it mean for women in the future?    

Unfortunately, the state pension needs to be regarded as a benefit rather than a guaranteed right. Young women need to be making their own pension plans and starting to save as early as possible. It’s worth capitalising on tax relief, matched contributions from employers and  compound growth over time. 

As leading pensions expert Baroness Altmann said, “You can’t rely on receiving state pensions at a particular age and you need to plan for private pensions or other income to have the best chance of the lifestyle you want or need when older.”

Despite the High Court rejecting the claims of discrimination, the Back to 60 group is determined to continue with its campaign and the Parliamentary and Health Service Ombudsman will  investigate a claim of maladministration.     

Whatever the conclusion, the case has highlighted the importance of women being aware of any future changes to the state pension age and protecting themselves financially.

Making sure you’re on track to retain your lifestyle in retirement…

Do you feel like you just go to work day in, day out, with the weeks quickly turning to months and the months to years?    

If that’s the case, you may be going through life with a vague notion that your pension contributions will be enough to give you a comfortable retirement without having done any precise calculations of late.      

Unfortunately, this means you could be on track for a significant shortfall. 

The pension and investment provider, Aegon, warns that members of Defined Contribution (DC) schemes will find that their retirement income will fall short of their expectations if they simply rely on the minimum automatic enrolment contributions and the state pension (currently £8,767). 

According to the insurer’s findings, most DC savers will need to increase their contributions to ensure they enjoy a similar lifestyle in retirement to their current one. It’s, therefore, worth taking stock as early as possible to find out how much more money you need to save.     

The figures Aegon used came from the government’s 2017 auto-enrolment review and highlighted broad target replacement rates (the percentage of an employee’s pre-retirement monthly income that they receive each month after retiring).          

Someone earning an average salary of £27,000 would need a 67 per cent replacement rate to maintain their lifestyle from pension savings of £303,900. They would require an income of approx £18,000 per annum in today’s money to continue to live in the way they were accustomed.    

On top of the state pension of £168.60 a week, a 22-year old earning £27,000 would need to contribute an additional 4 per cent to the current 8 per cent minimum combined contribution to reach their required monthly income. Failure to do so could result in a shortfall of £106,500. The extra contribution required would increase with age to:  

  • 13 per cent more for a 35-year old 
  • 29 per cent more for a 45-year old 

These figures are based on individuals just being in auto-enrolment schemes and having no existing pension pot. The additional percentages may sound steep but it’s worth remembering that some employers will also match your contributions. What’s more, with tax relief from your own employee contributions, it could cost as little as 1.6 per cent from your take home pay to reach the 4 per cent specified.

The key message is to take stock now. Think realistically about how much you will need to get close to maintaining your lifestyle once you retire. If a shortfall looks likely, explore the option of  paying more than the automatic minimum as early as possible. The longer you wait, the harder it will be to catch up.