Quite simply, it’s a quick and easy way to mentally calculate how long it will take money to either double or half in value, given a fixed rate of interest….take the above…72 divided by 3.6 equals 20…..72 / 3.6 = 20

It works both ways, whether you want to know how quickly your money will double in value or half, here’s some examples to demonstrate its simplicity…

At an investment growth rate of 6%, it will take 12 years for your money to double………72 / 6 = 12.

To double your money in 10 years, you will need an investment return of 7.2% per annum….. 72 / 10 = 7.2.

If university fees increase at 5% per year, fees will double in just over 14 years ….72 / 5 = 14.4

Savings rates are at very low levels. An account that pays 2% as opposed to 2.5% may not seem a very big difference but it will take 7 years longer at the lower rate for your money to double in value.

The rule of 72 is generally used for quick estimates and becomes less accurate the higher the percentage used, but it certainly is a handy rule to be aware of.

A final thought for the optimists amongst you… how about the rule of 114…this will give you an indication as to how long it will take to triple your money !

Upon implementation of the pension sharing order Mrs F was disappointed to learn that she only received £75000 of her former husbands pension, instead of the £90000 she was expecting and thought was agreed.

Mrs F issued a divorce petition on the 3rd April 2011. On the 5th December 2011 a pension sharing order was made in favour of Mrs F for 75% of the cash equivalent of Mr F’s personal pension, with this based upon the value provided by Mr F of £120000 as at the 2nd March 2011.

The decree nisi was made absolute on the 12th December 2011 and on the 19th December 2011 the pension sharing order and all appropriate documents are received by the pension scheme administrators.

The scheme administrators chose the 1st February 2012 as the valuation date to base the sharing order upon and on that date the plan was valued at £100000 ~ it had fallen in value by quite some margin since the valuation date of the 2nd March 2011 with Mrs F some £15000 worse off.

Mrs F has been a victim of what is referred to as “Moving Target Syndrome” where the valuation of the pension against which a pension sharing order is to be enforced is different at the time of implementation to the value provided at the date the order is granted.

Now, where the order is for or close to 50% of the pension being shared and there is movement in the value of the pension little injustice will have been done. Greater injustice will be done, however, in situations like Mrs F finds herself in.

To overcome situations like this occurring, parties could agree to move pension assets into less risky funds during the divorce, so as to alleviate any significant falls in value. Off course in doing so, you will also limit any prospects for growth.

Importantly, along with a sound working knowledge of the divorce process, a thorough understanding of where pension assets are invested and what options are available is vital, therefore, taking guidance and advice from an appropriate specialist like a Resolution Accredited IFA is advisable before any action is taken.

A brief heads up on contracting out of the state second pension and how it may affect you:

On 6 April 2012, contracting out for money purchase pensions e.g personal pensions, will be abolished. At the same time the Government will remove the additional restrictions around how, what are called, protected rights benefits can be paid.

As part of these changes, the contracted out providers are required under legislation to contact you if you are contracted out or you have paid up Protected Rights to confirm the following changes:

•  Protected Rights will be known as Former Protected Rights.
• Your pension scheme will stop being contracted out on 5 April 2012 and no contracted out payments will be expected for tax-years after 2011/12. If you are receiving rebates, you should start to accrue benefits under the state second pension from 6 April 2012.
• If you receive any contracted out payments for tax years ending before 6 April 2012, these will be invested in the former Protected Rights part of your plan.

• All funds built up within a money purchase pension arrangement will be payable on retirement in the same way, without the restrictions that previously applied to Protected Rights annuities and in certain situations restricted tax-free cash.
• If you are currently considering buying an annuity with your Protected Rights funds you wish to delay doing so until the changes come into effect.
• Consolidating all of your pension savings could result in higher annuity rates and a wider choice of annuities being available.
• The payment of benefits in the event of death can in future be payable as a lump sum regardless of marital status, so you may wish to review your position 

If you do have a Protected Fund pension fund and require any more information, then do contact us. 

Whichever group you fall into it is really important that you remember the successes that happened in the past year, no matter how minor ~ these successes may have come at work or may be personal and/or family related.

I can recall some things that have happened over the past year that have been disappointing, but I can also recollect many good experiences and some wonderful successes.

I try not to dwell on those events that have not been so good, but rather focus on those that give me and my family the most pleasure ~ we should all  concentrate on the good stuff and not reflect on the bad.

As we approach the end of one year and the beginning of a new one, use this time to think about all the positives in your life and banish the negatives.

Start thinking about what you could be doing differently at work, at home, in your personal life ~ re-visit and re-focus upon where your life is leading you, are you on track to achieve what you seek, has something happened this year to knock you off course, what needs to change to help you get to where you want to be..

A New Year is a great time for reflection and taking positive steps to change.

According to the most recent figures, more than 11,500 over-60s were granted a divorce in a year – a rise of 4 per cent in two years. By comparison, total divorce rates fell by more than 11 per cent in the same period from 2007 to 2009, the Office for National Statistics said ~ the Daily Telegraph has the full story.

For many in this age bracket, this is a time in their life when the children have flown the nest and financially couples are at their most healthiest.

With the children grown up and no financial dependants, divorce can often be triggered by the desire for new yet opposing challenges, a sense of freedom to seek out new opportunities and explore.

The ability to take on these new challenges and achieve and do all that is desired will largely be constrained by finances.

Whilst married, the accumulation of wealth may have been accomplished in a variety of ways ~ Investments like ISA’s, collectives & investment bonds, Company & Personal Pension funds, a family business, inheritance, property…

Financially, divorcing couples in this age category, yes, may well be in fine fettle, but their arrangements, are likely to complex ~ leading to greater emphasis on the financial aspects of their life when agreeing any solution and settlement.

The involvement of an experienced family law financial planner at an early stage in the process can help compile a full and accurate financial picture, potential scenario solutions can be offered and explored to assist couples map out whether all that they seek in their new life can financially be attained.