Part two of our joint effort with Positive Nation magazine

Things You Can Do

Many of you will be sitting on assets, unable to unlock value and make use of what is rightly yours. I'm talking about old insurance policies, pensions, taken out in the days before your HIV diagnosis, or even the property that you live in.

Over the last two years I've met many positive people with "idle assets". It's time to blow the dust off, see a financial adviser and find out just what you can do? Others may not be taking advantage of the benefits offered to you by your employer. If your outlook is now optimistic, isn't it time you considered what they are offering you?

Old Polices

Surrendering Endowment policies has been a popular way to realise capital in the past for people with HIV. In the early 90s it became quite a growth industry. If you still have these assets, you will have policy documents locked in the cupboard and hiding in a drawer. Some of these will still be current, others will be lying dormant.

One thing is for certain, if you ask a financial adviser if you should surrender a policy - they will be reluctant to comment. It is a decision that only you can make. 

You should have an identifiable need, before letting go of your policy i.e. a specific need for the cash. Before you surrender any endowments you should consider selling on the traded market. There is a keen market for these types of policies and investors waiting to part with their cash are likely to pay 10%-15% above the surrender value for "With Profits" policies.

Pensions

Many of you may have Personal Pensions. They are on hold and unable to use the funds. If you are under the age of 50, then there is little that can be done. As you paid your contributions the government either added, or allowed you to claim tax relief against this money. In return you agreed not to draw the benefits until between the age of 50 and 75.

Once you reach the age of 50 there are more options. However, you should be careful which you take as some could prove to be poor value for People with HIV. Traditionally people have been forced to exchange their "pot" for a regular income. This has been through an annuity. This means you surrender your capital in return for a life assurance company paying you an income for life. If you die early, the life company are likely to keep the capital - not ideal. This route can also prove difficult for gay couples to provide security for each other; few life companies will recognise same sex couples and the ones that do may offer poor value. 

There are now other ways, once you reach 50, that you could benefit and defer the purchase of an annuity until the age of 75. A retirement cash account, would allow you to draw capital from your pot and leave the money invested in your own name. If the worst was to happen the balance, minus a tax charge, would then be left to your loved ones. This method could allow you to retire part time and supplement your other sources of income or, if required, provide maximum income as early as possible. Positive people would obviously have to consider their own personal outlook, and ask their own personal adviser to tailor a plan to their own needs. They would advise on issues such as Inheritance Tax for large funds and legal obligations that the fund would have to meet.

Company Pensions

How many of you have been reluctant to join your employer's scheme, even though they offer you incentives to join? A few years ago your health status may have meant that planning for the future was just not an option. You may now be tempted, but what considerations are there for People with HIV?

Most employer schemes offer Death In Service benefit. Ie. Life Cover. Some companies will ask about your health status; others may not. I suggest you get an application form and read the questions carefully. Ask a financial adviser to enquire if the policy would pay out in the event of HIV and Aids. (You shouldn't do this part yourself). 

You should also check the benefits payable in the event of ill health. Most schemes will pay a long term pension should an employee fall ill. This could be after a qualifying period of say 5 years for example. You should be aware of how long you will have to contribute before you qualify. One local government scheme will double your service in the event of you falling ill after 5 years membership, in effect giving you a pension income based upon 10 years service. This would be good value, if someone with HIV was forced to give up work. You may also be able to transfer idle personal pension funds into your company scheme - enhancing these potential benefits further. Each case should be looked at individually - these are not simple decisions.

Property

A person's home is normally their biggest asset. Some of you may be making it work for you already by letting rooms. Others may have sold a bigger place to release some of their capital.

Trading down to a smaller property is always the cheapest way to release your assets. This will provide cash in your hand immediately, without lining anybody else's pockets. However, you may be reluctant to move away from your roots or simply like where you live too much. 

If you can afford to pay a mortgage from your monthly income, then you could consider raising cash by this method. An interest only advance may allow you to defer the decision to sell your beloved home. You could also raise money to invest into further property. One example is someone buying two buy-to-let flats from cash raised against their home. This has given them a business interest that provides them with extra monthly income to spend.

If you are over the age of 60, you could consider selling part of your home as a sitting tenant. There are a host of companies that would offer cash in return for a stake in your home. You would be allowed to stay in the property for as long as you need as a sitting tenant. All of the legal procedures would be dealt with by a solicitor of your choosing. Similar to this option you could take a "roll up mortgage". These allow you to borrow money from a bank or building society and not make any monthly payments. The interest owed is added to your borrowing and is settled, when you no longer need the property. The interest rate is likely to be higher than the normal high street rate. 

Getting Advice.

So are you surprised? Thought your options were limited eh? Where did all these possibilities come from? ......
Some of this planning is not straight forward and offers little remuneration for financial advisers. This probably explains their reluctance to get involved or offer some of these solutions. You should find an adviser, who is used to looking after People with HIV, who understands your feelings and concerns, and will be willing to deal with some of the less well-paid issues on a set fee basis. The long term benefits to your financial future will probably be worth the effort and cost. 

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