Please forgive me for starting the New Year talking about divorce. It is something which affects so many of us these days, whether directly because we are involved, or indirectly as family members or friends are involved. According to the Office for National Statistics there were 119,589 divorces in England and Wales in 2010, an increase of 4.9 per cent over the previous year.

Whilst divorce must be very difficult for those involved, especially if there are children to consider, it does offer the prospect of a new start in life. In that sense the subject fits in with our thoughts at the start of a new year with all the possibilities that 12 months of, as yet, unwritten stories of our lives holds out for us.

Why Pensions?

Next to the family home, the single largest asset that needs to be considered when a marriage breaks down is often the pension benefits. The Matrimonial Causes Act 1973 gave the courts of England and Wales the power to take the value of a couple’s pension rights into account when dealing with a divorce settlement. The Act established the right of the ex-spouse to claim against the member’s pension rights. However, it was not until the Pensions Act 1995 that it was made compulsory for pension rights to be taken into account. We have produced a new Guide: Pensions and Divorce which you will find on our website at www.arch-fp.co.uk/pensions_and_divorce.php.

You may wish to bring this to the attention of anyone you know who is going to have to deal with this subject during 2012. If you are going to read the Guide online, perhaps on a tablet computer, then you will find the 17 page version easier to follow. However, if you are going to print the Guide you will save on toner if you use the alternative 6 page version. The text is virtually the same in both versions.

It just remains for me, on behalf of the directors, advisers and support team at Arch to hope that you and yours will be happy and prosper in the year ahead.

If you would like to receive advice on pensions and divorce, or your pension planning generally, please ask your usual Arch adviser or telephone 01483 204600 or email enquiries@arch-fp.co.uk.

Peppa Pig does so loves muddy puddles. If you have some idea of what I am taking about then you either have young children or you, like me, delight to be a grandparent of young children. I often think that if Peppa Pig could be employed by the Financial Services Authority to teach children the basics of savings and financial planning, then it would help people avoid a lot of fundamental financial mistakes later in life.

The New Junior ISA

My excuse for introducing this particular Arch blog with Peppa Pig is the new Junior ISA which became available from 1 November 2011. The Junior ISA is a worthy replacement for the Child Trust Fund (CTF) which signally failed to catch the imagination of parents. One in four parents who received the CTF voucher of £250 (that is nearly 350,000 people) failed to invest it within the twelve month deadline! Although, as one fund management company was quoted at the time “leaving the £250 in cash would barely buy a round of drinks on the child’s 18th birthday”.

The Junior ISA is quite different – for a start there is no gimmicky voucher. It is very similar to the ‘adult’ ISA in that parents, grandparents, or indeed anyone else with an interest in the child’s welfare, can invest up to a total of £3,600 each tax year (index linked from April 2013). With an 18 year investment period for a new baby and using conservative estimates then there could be getting on for £100,000 in an ISA account by the time the child reaches his or her maturity. This is then rolled over into an ‘adult’ ISA to which normal ISA rules apply.

For parents and grandparents who use ISAs for their own wealth creation, the ability to start investing in a tax efficient manner much earlier than the current age 16 or 18 will be very attractive. Of course, it will also help to reduce their own inheritance tax liability especially those with a good number of children and grandchildren.

We have produced a new Guide: Junior ISAs which you can download or print from our website at www.arch-fp.co.uk/junior_isas.php.

If you would like to discuss investment planning for your children/grandchildren please ask your usual Arch adviser or telephone 01483 204600 or email enquiries@arch-fp.co.uk.

Christmas Greetings

May I take this opportunity on behalf of the directors, advisers and support team to wish all of our clients and blog followers a Very Happy Christmas and a Peaceful and Prosperous New Year.

Our offices will be closed from 1.00pm on Friday 23rd December and will fully open again on Tuesday 3rd January, although there will be a small number of staff in the office on 29th and 30th December.