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Expat Investor : November 2007
NEWS November 2007 EXPAT INVESTOR 3 Waiting will lose you £116,000 N&P's account for the over-50s decision and wait for a Personal Account to be set up for them, the same contribution rate will amass them just £496,000 at 65. Those who contribute the lower levels of £1,200 or £2,400 a year could also miss out on significant sums of money, as the table shows. However, the value of starting retirement saving early appears not to be getting through to many investors. Simon Fraser, President of Institutional Business, tells Expat Investor, "Once someone falls behind in their retirement saving, the cost of making up the gap becomes exponentially larger over time and will eventually reach a point where it is unsustainable. Fast Facts 99120 Fast Facts 99121 Fast Facts 99122 NORWICH & Peterborough Building Society (N&P) has launched a savings account for customers in Gibraltar aged 50 or over -- offering an interest rate of 5.60% and easy access to their savings. N&P says many people don't wish to tie up all of their savings in long-term investments, but do want a decent rate of return on their money without being penalised for withdrawals. The 50 Plus Savings Account, confirms this Gibraltar- based deposit-taker, comes with a guarantee that the interest rate paid will be no lower than 0.5% below UK Bank base rate until 1st January 2010. "And, where some providers insist that customers manage their savings purely with a card, N&P's new 50 Plus Savings Account comes with a passbook," adds N&P. Linda Cooper, N&P's business manager for Gibraltar & Spain, tells Expat Investor, "We are delighted to be offering the 50 Plus Savings Account to our customers here in Gibraltar. We think the account is one of the best of its type in the market because it is clear and transparent and has 'no strings attached'. For example, it includes a really strong rate with a guarantee (and no short term bonus), easy access to money, and the absence of any stringent maximum restrictions on how much you can invest. The account is an option for people in this age group who want a good rate of interest on their money, but who want the ability to have access to their savings without being penalised. "We chose to make it a passbook account, as we know that some customers don't like managing their money just with a card. However, we still offer the option of branch, post or internet, so it's easily accessible to everyone." The minimum investment sum is £5,000 and the maximum £1 million. Fast Facts 99002 a guide to structured products, designed to simplify the concept of these investments. Peter Horrell from Barclays says, "We are delighted to have launched the Barclays Wealth podcasts. Moving to a new country can be daunting, and with the immediate pressures of relocating and working in a different environment, financial matters are often an added pressure. By talking to our clients it has become apparent that they do not have time to read through reams of information and scour the internet in order to decide on the issues facing them, from purchasing a home to investing wisely. By launching the Barclays Wealth podcasts we aim to provide clear and consistent information to international investors to enable them to make informed decisions." Barclays podcast launch BARCLAYS Wealth has launched a number of podcasts designed to guide international investors through financial matters, enabling them to make informed decisions. The Bank says these podcasts are aimed at expats who face daunting financial decisions when moving to a new country. The podcasts, which can be accessed via www.barclays.com/internation alpersonal/podcasts, include: an outline of the options that are available to international investors looking to buy a UK home or investment property. a guide aimed at enabling them to protect and maximise their wealth in a foreign country. PEOPLE who put off retirement planning until the 2012 launch of Pe r sonal Accounts will be missing out on five years' investment growth, warns Fidelity International. Fidelity International's research shows that even though the UK government's introduction of Pe r sonal Accounts in 2012 could help encourage more retirement saving, those who wait until then to start could miss out on as much as £116,000. An individual aged 30 who starts saving now, contributing the full £3,600 annual amount allowed in the Personal Account proposals, will build a pot of £612,000 at age 65. If they defer the "By way of example, a 30-year-old man is seeking to fund a retirement of two-thirds of his final salary and he has been saving 5% of his salary a year. This would require an increase to a contribution rate of approximately 15% of salary across the remainder of his working life. But if we assume that he carries on paying only 5%, then the amount required to meet the same target five years later, at age 35, has risen to 17%. If the percentage increase is delayed continuously, then by the age of 40 contributions need to rise to 21% of his salary, by 45 to 27% and by 50 to an unlikely 36%." Monthly contributions: Sum built at 65, Sum built at 65, Shortfall starting at 30 (2007) starting at 35 (2012) £300 £612,000 £496,000 £116,000 £200 £408,000 £331,000 £77,000 £100 £204,000 £165,000 £39,000