Tuesday, 12 March 2019 / Published in Advice, EFPG, Financial Advice, Tax

New measures introduced in the Italian 2019 budget are designed to attract people who have sufficient economic resources to be able to contribute to the Italian economy.

From 1 January 2019, any retired immigrants who are not resident in Italy and are in receipt of a pension could be eligible for a 7% flat-rate tax on all their foreign income.

Some local authorities are even offering houses for as little as €1 if certain conditions involving restoration of those properties are met.

If you would like to know a little more please see the main article.

Friday, 08 March 2019 / Published in Advice, EFPG, Financial Advice

As today is International Women’s day we would like to comment on a series of factors that can influence a woman’s financial status and independence.

Income Inequality

The law is clear, men and women should be paid equally. However, in Gibraltar there is a wide gap in employment and earnings between men and women:

  1. The gender pay gap stands at 22.5%. This means that on average women earn 22.5% less than men which equates to 82 days of unpaid leave.
  2. Women account for 61.3% of people earning less than £12,000 per annum and only 19.1% of people earning over £60,000.
  3. 67.1% of people with  part-time positions are women and only 41.1% of those with full-time positions.
  4. In the private sector and the M.O.D. less than 40% of full-time positions are held by women. Only in the public sector are things more equal with women holding 54.2% of full-time positions.

So how can this inequality be addressed?

The first steps need to be taken by employers. Employers who want to close their gender pay gap need to overcome the traditional views on parenting roles, in which the mother is expected to look after the children. Women are as such often pigeon-holed into taking up part-time positions. This can have an effect on women’s career progression. Further,  men are assumed to be only suitable for full time jobs and this can become an obstacle for men to opt for part-time or flexible working if they will be taking care of the children.

In addition, there is sometimes an unwillingness by employers to take on women of a child-bearing age to positions of responsibility.

Employers need to re-configure the idea of full and part time jobs. They need to incorporate more flexibility in the working hours that will allow women and men to balance their family lives and workloads.  Furthermore, employers need to ensure that career progression on a part-time basis is not only acceptable, but aspirational.

We know that many of the more poorly-paid occupations are those traditionally done by women, requiring skills traditionally regarded as ‘feminine’, such as people skills and caring skills. So women ‘choose’ to work as nurses, teachers, or shop assistants, while men ‘choose’ to be surgeons, construction workers or engineers. The issue here is that we undervalue traditionally female skills. But there is also a perceived wisdom that women choose low-paid occupations because they offer more flexibility, or are more family-friendly.

Opening up traditionally male sectors and occupations to flexible working would encourage more women to work in them, and more men to switch to working part-time.

Pension Inequality

Aside from being denied the potential to earn more money, the knock on effect is that women save around 40% less into their pension pots than men. Part of this may be that financial decisions are often linked to the traditional ideas about male and female responsibilities. The advice women receive on pensions generally comes from men (e.g. fathers or partners), deferring to them the decision-making about pensions. Women should be encouraged to take control of decisions that effect their own personal financial well-being.

In Gibraltar the problem is compounded by traditional pensions being insurance company-based products provided by the likes of Generali and RL360. These products can provide reasonable value for money if payments are made throughout the life of the policy until the maturity date. However, if payments are stopped for an elongated period – especially in the early years, the policy might lose significant value or even lapse with no value at all.

EFPG has a pension solution for young families. The Jubilee pension is inherently flexible and low cost as we manage and administer it. EFPG is therefore able to offer a 12 month break of payments for young couples who have a new child, that will have no detrimental effect on the value of their pensions. This is only available once the pension has been active for 18 months but we hope that this will encourage young couples to start saving early and close the gap in pension inequality.

Friday, 08 February 2019 / Published in Advice, EFPG, Financial Advice, Investment Advice, Products, Services

How hidden costs can affect your savings

Occasionally EFPG health-checks plans and policies that clients already have in place to judge whether it would be better for them to stick with their current arrangements or jump ship to save money.

In doing so, we have to look under the bonnet of a range of different products that we are not familiar with.

EFPG has found that two of the most insidious wealth-killers are bid/offer spreads and trading costs.

EFPG’s regular contribution local pensions and savings plans do not apply bid/offer spreads and for regular investments in investment funds, there are no trading costs.

In the main article (available here) we have described bid/offer spreads and have designed a basic interactive model that allows you to estimate what the potential cost of trading fees might be if your portfolio is re-balanced periodically.

Monday, 14 January 2019 / Published in Advice, EFPG, Financial Advice, Investment Advice, Products

In December two billion pound plus property funds reduced the value of their funds by close to 6% by changing their pricing policies.

There is no concern about the quality of their investments but as investors are taking out their money, the funds are facing costs associated with the sale of properties to meet the cash flow demands of investors redeeming shares.

Whilst property funds in general have shown that some property exposure is a relevant part of one’s portfolio of investments, such changes in pricing have reignited the debate with regards to whether those funds manage their cash flow within appropriate boundaries for retail investors.

For the full article, please follow this link.

Tuesday, 08 January 2019 / Published in Advice, EFPG, Financial Advice, Products, Services

QROPS are useful but are not the only answer

Despite QROPS being touted as the only solution, if you have left the UK permanently and have pension benefits in a UK Scheme that you have not accessed there are three main courses of action.

• Leave the benefits where they are

• Switch to a QROPS

• Switch to a UK SIPP

In 2017 Her Majesty’s Revenue and Customs removed a number of advantages of transferring to a QROPS. For pensions that were transferred prior to April 6th 2017, most of those advantages are still applicable.

Post April 2017, a QROPS is still a useful option but for a narrower range of people depending upon their particular individual circumstances.

EFPG has written an article covering the subject in a little more detail (link) but to cover such an important issue as your pension, you should discuss the matter with a financial adviser who will provide you with appropriate advice rather than advising you on a QROPS.

If you would like to contact EFPG about the above or the article please click here and send us a message or call us during office hours.