Sean McCann, tax specialist at NFU Mutual says, “With inflation up and the credit crunch continuing to bite many people are looking for ways to alleviate their financial pressures. In fact, there are basic steps that people can take to utilise their tax opportunities and save money.”

Child tax credits
McCann says, “Many people are still unaware that they can claim Child Tax Credits from the Government as you have to actively seek it. But you need to make sure you get what you are entitled to.

“The key thing to remember is that if you contribute to a pension this decreases your taxable income and may in turn mean you can qualify for tax credits.”

Pensions
Many higher rate taxpayers do not claim the 40% tax relief on their personal pension as they receive only basic-rate tax relief of 20% automatically.

McCann says, “This is an area where you can really maximise tax savings. You can back date your claim for tax relief for up to six years, so at a time when belts are tightening, this is a simple way to claw back the tax owed to you.”

Life insurance not written in trust

Some people are neglecting to put their life insurance into trust so when you die, it comes back into your estate and could be liable for 40% inheritance tax. However, this can be alleviated as any existing policies can be put into trust. McCann comments, “This measure can save a great deal of money so we recommend that people seek advice to ensure that they are not paying unnecessary tax.”

1. The information in this article is based on NFU Mutual’s understanding of current legislation, which is subject to change. You should not take or refrain from any action based on the content of this article without first taking professional advice based on your own circumstances.
2. NFU Mutual Financial Consultants advise on NFU Mutual products and services and in special circumstances those of other providers.
3. NFU Mutual offers a wide range of products, including general insurance, life, pensions, investments and risk management services. These products and services are delivered through the agency network, as well as through a direct sales and service centre. Risk Management Services are delivered through NFU Mutual Risk Management Services Limited.
4. With over 300 offices located in rural towns and villages throughout the UK, NFU Mutual has become part of the fabric of rural life and remains committed to serving the needs of people who visit, live or work in the countryside.

uSwitch.com, the independent price comparison and switching service, is expanding its range of products with the launch of its new life insurance comparison channel.

The service will enable consumers to search the whole of the life insurance and critical illness market to help them find a competitively priced policy to suit their needs.

In many cases customers who apply and complete the medical underwriting questionnaire online will be able to place their policy on risk within 24 hours. However, there is also an ‘Express Underwriting’ telephone service which enables some customers to get immediate cover.

uSwitch.com’s new service will not offer ‘current costed’ cover - policies where a customer’s life insurance premium increases with age - as with such cover there is a high risk that consumers will not understand the total cost of the policy over its full term.

The new life insurance service will display the key features for each product, from each provider, so consumers will not have to go through to the provider’s website to obtain further information. Throughout the application process, consumers are continually reminded of the importance of providing full and accurate medical details in order to ensure that the policy is valid in the event of a claim. The ‘Express Underwriting’ service is being provided by uSwitch.com’s partner, Direct Life and Pension Services. This service supports full disclosure as well as aiding the customer through the whole underwriting process, whatever their preferred application route.

Simeon Linstead, Head of Personal Finance at uSwitch.com, said: “This is all about helping consumers to search the market for a life insurance policy to suit their needs. It will be a quick and simple one-stop shop application service. The medical underwriting is straightforward and customers can be covered instantly in some cases. Unlike other life insurance services, we won’t offer ‘current costed’ products - so there are no nasty shocks in store as the customer gets older.”

Financially stretched homeowners could be overpaying by £310 million every year by taking out life insurance with their mortgage provider, which many mistakenly believe is compulsory.

A study by the Post Office reveals that over a third (34 per cent) of people completing a mortgage application bought life insurance through their mortgage provider, which could be costing them an additional £2000 each.

Confusion appears to be the main reason for people choosing to take out life insurance this way; 35 per cent said they felt pressured into buying it, or believed it was compulsory to purchase life insurance with the same provider.

Over half (54 per cent) of respondents said it was simply more convenient to arrange their life insurance and mortgage together, despite the fact they could be wasting hundreds of pounds by failing to shop around.

Worryingly, it seems many people are actually aware they are not getting the best deal, as only 16 per cent said that their mortgage provider offered the best value on life insurance.

Duncan Caesar-Gordon, head of protection at the Post Office, said: “Homeowners’ finances are already being stretched on a daily basis, so it’s essential that people save money where they can.

“This is why it’s vital that homeowners understand it is not a requirement to take out life insurance with the same company which provides your mortgage. People have the right to shop around across the market and decide for themselves which product offers them the best value and is the most suitable for their life cover needs.”

BUPA Individual Protection is reducing the premium rates for its award winning critical illness plans with immediate effect. For critical illness plans bought alongside a mortgage, the rates have reduced by around 7.3 percent and for stand-alone critical illness cover the reduction is around 5.7 percent.

For example:

• A female non smoker aged 30 next birthday taking out £75,000 of critical illness cover alongside a 30-year mortgage will now pay £17.91 a month (£19.21 previously)
• The same individual taking out stand-alone critical illness cover will now pay £29.94 a month (£31.64 previously)

The plans may be submitted online via BUPA Individual Protection’s recently launched extranet at www.bupa.co.uk/bupaindividualprotection. Intermediaries using this facility have already commended its speed of turnaround at an average 20 minutes from initial decision to final acceptance.

Steve Casey, product & marketing manager at BUPA Individual Protection, said: “We want to make our five star rated products available to as many people as possible. Feedback from intermediaries suggests that an increasing number of people are looking at reviewable premium business as an alternative to guaranteed premiums.”

BUPA Individual Protection’s range of critical illness products was recently awarded five stars from Defaqto, the leading research company.

The annual no-smoking day on 12th March will give smokers a great opportunity to kick the habit and save themselves thousands of pounds on their insurance in the meantime.

Insurance companies consider ex-smokers to be ‘non-smokers’ a year after they have given up.  Being classed as a non-smoker means that, for many types of policy such as Life Cover and Critical Illness Cover (CIC), premiums can become around 50% less expensive, so many people could still save money even if their policy has been in force for many years.

Matt Morris, Policy Adviser at Lifesearch, said: “’Do you smoke?’ is one of the first questions that an insurer will ask a new client, as a smoker will pay considerably higher premiums than a non-smoker. To be classified as a non-smoker by an insurance company you must have quit smoking for at least 12 months. At that point, you should speak to an adviser to see if they can rebroke a new policy for you at a cheaper premium. A cheaper premium is not certain, as it also depends on age and health, but there is a very good chance that the premium will fall.”

A no smoking ban in all enclosed public places - such as offices, factories, pubs and restaurants - came into force across the whole of the UK between April and July 2007.

Research showed that New York (2003), Ireland (2004) and Scotland (2006) experienced a fall in the number of smokers after a ban on smoking in public places was introduced.

The smoking ban came into force last year across the UK on  2nd April (Wales), 30th April (Northern Ireland), 1st July (England). A smoking ban in Scotland came into force on 26th March, 2006.

A survey carried out by www.nosmokingday.org.uk for last year’s event showed that women were most likely to have tried to stop smoking on No Smoking Day with 17% of those aware of the day making a quit attempt compared to 16% of men. While quit attempts were highest among the 16-24 age group and 25% of those aware of the day in this age group tried to stop.

ASDA is celebrating its first anniversary of offering life insurance and protection advice to its customers by breaking the £1billion barrier. The difference ASDA Life has made to the lives of real people has been impressive. ASDA Life has written over 8,000 protection policies, giving over £1billion of protection cover for UK families. They report a 50% improvement in policy sales compared to the previous year.

Industry research shows there is a protection gap of £2.3 trillion in the UK. This is the gap between the amount each individual family should be insured for and the amount they are actually insured for. ASDA Life’s protection advice offer means millions of shoppers now have the chance to speak to a protection specialist, free of charge and so protect their financial future against the difficulties that life can throw at them.

ASDA appointed LifeSearch, the UK’s leading life insurance broker, at the end of January 2007, meaning that unlike any other supermarket, ASDA could offer free independent advice and a full range of protection products, including critical illness, income protection and family income benefit, from a comprehensive range of insurers.

Other supermarkets typically offer a one-size-fits-all product from just one insurer, give no advice, and are rarely as competitive on price as ASDA Life, they say.

Leading mutual insurer LV= has announced a new partnership with one of Cilla Black’s chosen charities. Cilla stars in a TV advertising campaign for LV= promoting the ’50 Plus Plan’ life insurance.

LV= will donate £1 to the charity WRVS for every new 50 Plus Plan taken out during 2008. The funds raised will be used to support the range of services provided by WRVS’ 56,000 volunteers, helping elderly people who might otherwise feel lonely or isolated.

Cilla Black said: “I am delighted that LV= is helping one of my favourite charities. This generous pledge will make a real difference by alleviating loneliness and helping older people to get out and about. As a mutual insurance provider LV= really cares about its customers and the community, and this shows through with this fantastic collaboration with WRVS.”

Lynne Berry, Chief Executive of WRVS said: “We are delighted that LV= and Cilla Black are giving their support to WRVS. Our volunteers provide vital services to thousands of older people every day. The money raised through this fantastic scheme will allow us to help even more elderly people stay independent at home and active in their community.”

Heidi Welch, Direct Distribution Director at LV= commented: “Our TV advertising campaign and relationship with Cilla has been very well received and it is a great privilege to be able to strengthen our partnership by supporting WRVS. We are looking forward to helping to make a real difference to the everyday lives of older people.”

LV= launched the 50 Plus Plan in October 2004. It is a life insurance policy aimed at 50 to 80-year-olds and provides guaranteed cover without the need to answer any health questions, with a cash lump sum payable on death. Cilla Black first became the face of the LV= 50 Plus Plan TV advertising campaign in June 2007.

Norwich Union announces £2.3*^ billion special bonus and puts third, improved reattribution offer to Policyholder Advocate

* Special bonus announced for 1.1 million with-profits life insurance policyholders on 90/10 basis
* £2.1 billion to go to policyholders; £230 million to shareholders
* Average addition to policy value of around 10% over three instalments
* Third, improved reattribution offer put to Policyholder Advocate for balance of inherited estate.

Special bonus details
Norwich Union Life, a division of Aviva plc (”Aviva”), today announced a one-off, special bonus worth around £2.1 billion for around 1.1 million with-profits policyholders in its CGNU Life and CULAC with-profits funds.

This gives a significant bonus per qualifying policyholder. The bonus will be used to enhance policy values by around 10% in total in three instalments (the qualifying dates being 1 January 2008, 2009 and 2010). In accordance with the way the funds are run, this bonus distribution is being split on a 90/10 basis between policyholders and shareholders with policyholders receiving a total of £2.1 billion and shareholders £230 million.

This record special bonus addition has been made possible by the strength of the two with-profits funds and a change to the investment strategy for supporting policy guarantees. This has enabled the business to free up a significant part of the inherited estate for payment to policyholders. This change will not affect normal policy returns nor will it impact on policyholders’ security or alter the type of investments backing their policies.

The special bonus has been fully endorsed by Norwich Union’s With-Profits Committee, recently restructured to have a majority of independent members under the chairmanship of Sir Nicholas Montagu. To receive the first special bonus instalment a policyholder would need to have a qualifying policy invested in the CGNU Life or CULAC with-profits funds on 1 January 2008. (See Notes to Editors for full details).

Mark Hodges, chief executive of Norwich Union Life, said: “This is fantastic news for qualifying policyholders. These funds are very strong, with good equity backing ratios# and highly competitive returns. As a result of the funds’ financial strength, performance, and the changes made to our investment strategy we can release around half of the inherited estate - 90% to our policyholders and 10% to shareholders. This approach has been endorsed by our With-Profits Committee.

“This special bonus is a major boost to policy values. We continue to believe that well-run, open, with-profits funds deliver real value for long term investors.

“Over the course of the next few weeks we will be writing to qualifying policyholders to give them more detailed information.”

* Net of tax; All figures rounded.
^ As at 1 January 2008
# Proportion of investments held in shares and property

Improved reattribution offer made to Policyholder Advocate
In addition to today’s special bonus announcement, Aviva, Norwich Union Life’s parent company, also confirmed that it has put an improved reattribution offer to Policyholder Advocate, Clare Spottiswoode to buy out eligible policyholders’ interests in the remainder of the inherited estate.

This is the third offer put to the Policyholder Advocate following nearly a year of detailed negotiations and having worked with her for two years. The company has asked the Policyholder Advocate to respond to the offer by the end of the month so it can aim to pay electing policyholders before the end of the year.

Mark Hodges said: “We think it is now time to give clarity to policyholders and shareholders alike. We have made this improved offer to help bring the negotiation process to a mutually acceptable close.

“I have asked the Policyholder Advocate to respond to our offer by the end of this month so we can keep the process moving forward and conclude our negotiations. We are keen to be able to put an offer to our policyholders as soon as possible so they can decide for themselves whether they want to take it or not.

“Today’s special distribution will give our policyholders around half of the inherited estate on a 90/10 basis. We want to reattribute the balance. Our reattribution offer means that eligible policyholders stand to receive a significant cash windfall if they decide that’s what they want.”

Norwich Union today announced a series of price reductions across its Mortgage Life Insurance (MLI) and Term Assurance product ranges.

The move is designed to help those feeling the effects of the credit crunch and could ease the financial burden for the average house buyer. The reprice has focused particularly on providing affordable cover for sums assured of £175,000 and above. Notably the average house price now stands at £183,959.(1)

Those purchasing policies with critical illness cover will benefit in particular.

Decreasing term insurance with CI cover has been cut by an average of 3%, while level term with CI cover has seen an average cut in rates of around 2%.

To further help customers, the reprice will include MLI and term assurance policies lasting longer than the traditional 25 year lending term. This reflects changes in market demand, which has seen increasing numbers of consumers requesting cover for 30 or 40-year mortgages.

Darren Dicks, head of protection marketing for Norwich Union, says: “We constantly review all of our protection products to make them as competitive as we can to the widest possible audience. This latest reprice brings welcome news to the UK’s 12 million(2) mortgage holders, at a time when many people are feeling the pinch.

“There is still a huge demand for people to get on and move up the housing ladder with around a quarter of a million mortgages(3) taken out in the last quarter alone. The credit crunch has meant that money is tighter for a lot of mortgage holders, so we are delighted if we can help people to save in other areas.”

(1) Source: Nationwide Building Society

(2) Source: Council of Mortgage Lenders. Actual figure is £11,895,000 as of Q3 2007.

(3) Source: Council of Mortgage Lenders

A specialist website will always find you the lowest quotes for the cover and bring them together so that you can take the time to go over them and reading the small print is very important as hidden extras and the terms and conditions of the policy can be found here.

Life assurance has to be given some serious thought, you have to sit down and ascertain how much cover you need to take out. In order to do this you have to give some thought to such things as your dependant children’s education, clothing etc.. and a good guide as to how much you should take out is multiplying your salary by around 5 times.

The next decision you have to make is the type of life assurance you wish to take out. Term life insurance is one of the easiest types to take out and a specialist website will be able to find you several quotes for the product so you are able to choose the best for your circumstances. Along with getting low cost insurance you will also get facts regarding products which go a long way to helping you decide which is the most suitable.

An online specialist in life assurance will be able to gather together quotes from the top insurers in the UK so that you can then go over them for the best deal for your circumstances. It is important that you read the small print of any policy you are taking out as insurers can add additional costs; you can also find the terms and conditions of the product.