Another way of using your saving to help younger members of your family get on the property ladder is through a "family offset" mortgage. These deals allow you to retain ownership of the money that you put up for a deposit. "The advantage is that the savings remain in the name of the parents and can revert to them at a later date. But parents give up any return on the cash in favour of helping the child," said David Hollingworth of London & Country Mortgages.
IFA’s at Enable of Bishops Stortford could more fully explain this kind of deal, where you put your cash into a linked savings account and the money acts as a deposit and will lower the monthly mortgage repayment, as interest is charged only on the balance remaining. For example, Yorkshire and Market Harborough building societies allow the parent to deposit cash that reduces the interest charged on the child's mortgage. Marsden Building Society offers a slightly different approach, enabling the buyer to borrow 100pc of the purchase price, subject to 20pc being deposited in the linked account. A charge is placed over that cash.
Some offset deals allow borrowers to set up more than one linked account, so both parents can contribute but don't need to pool their money formally. However, you must be prepared to lock up your money for years; you will not be able to get your hands on it until the mortgage is worth 75pc of the property value.
Wednesday, 31 October 2012
Downsizing payouts
A survey conducted by Lloyds TSB recently found that Just over half of home owners they surveyed who are planning to move house in the next three years said they plan to downsize, compared with just over a fifth (22pc) who are looking to trade up to somewhere bigger.
63pc of those looking to downsize are aged over 55, more than a quarter are aged between 46 and 55 and around 5pc are aged between 36 and 45. 33pc of potential downsizers saying they need to move to reduce their household bills and 37pc saying they would like to free up some equity. Three in 10 of those planning to trade down said they were doing so to boost their retirement income.
Trading down from a detached home to a bungalow could produce an average windfall of just over £97,000 across the UK. Meanwhile, someone downsizing from a detached home to a semi-detached property across the UK could gain just over £120,000 on average, a 46pc increase on the £82,412 typical windfall in 2002.
Stephen Noakes, mortgage director for Lloyds TSB, said: "Downsizers are now playing a key role in the housing market and, as the study shows, we are starting to see home owners on different stages of the property ladder considering it a sensible option as more and more families are looking at ways to save money." Whatever stage of the housing cycle you are facing Enable’s IFA’s can help you find the best financing deals to suit the needs of your family.
63pc of those looking to downsize are aged over 55, more than a quarter are aged between 46 and 55 and around 5pc are aged between 36 and 45. 33pc of potential downsizers saying they need to move to reduce their household bills and 37pc saying they would like to free up some equity. Three in 10 of those planning to trade down said they were doing so to boost their retirement income.
Trading down from a detached home to a bungalow could produce an average windfall of just over £97,000 across the UK. Meanwhile, someone downsizing from a detached home to a semi-detached property across the UK could gain just over £120,000 on average, a 46pc increase on the £82,412 typical windfall in 2002.
Stephen Noakes, mortgage director for Lloyds TSB, said: "Downsizers are now playing a key role in the housing market and, as the study shows, we are starting to see home owners on different stages of the property ladder considering it a sensible option as more and more families are looking at ways to save money." Whatever stage of the housing cycle you are facing Enable’s IFA’s can help you find the best financing deals to suit the needs of your family.
The bank of Mum and Dad is being kept busy...
It has been in the news a lot recently that the bank of Mum and Dad are being kept pretty busy. As experienced IFA’s at Enable of Bishops Stortford we see a lot of first-time buyers relying on the bank of mum and dad to get them on the property ladder. They are not alone according to recent research, the financial assistance provided by parents helped 100,000 buyers get their first home between 2008 and 2011.
The report, by HSBC and the Centre for Economics & Business Research, estimated that without this help house sales worth £5.3bn would never have taken place. Before the credit crisis most first-time buyers were able to borrow 100pc of their property's value. Most lenders at the moment are asking for a 10pc deposit, so those who can afford to put down a larger deposit would qualify for a far wider range of mortgage deals at lower interest rates. So at Enable we are able to help parents or grandparents who want to help younger members of their family get on the property ladder to find the right deals and make significant savings for the family.
For parents who have enough savings to help their offspring but don't want simply to hand over a cheque, there are a number of mortgage schemes that can help. Lenders have also devised a number of products aimed at parents who want to help but don't have surplus funds sitting around. Enable’s experienced Independent Financial advisors can talk you through your options.
The report, by HSBC and the Centre for Economics & Business Research, estimated that without this help house sales worth £5.3bn would never have taken place. Before the credit crisis most first-time buyers were able to borrow 100pc of their property's value. Most lenders at the moment are asking for a 10pc deposit, so those who can afford to put down a larger deposit would qualify for a far wider range of mortgage deals at lower interest rates. So at Enable we are able to help parents or grandparents who want to help younger members of their family get on the property ladder to find the right deals and make significant savings for the family.
For parents who have enough savings to help their offspring but don't want simply to hand over a cheque, there are a number of mortgage schemes that can help. Lenders have also devised a number of products aimed at parents who want to help but don't have surplus funds sitting around. Enable’s experienced Independent Financial advisors can talk you through your options.
Monday, 22 October 2012
Make sure your address is right for credit
County court judgments (CCJs), defaulted payments and bankruptcy orders leave a black mark against your name when trying to secure credit. But sometimes a genuine mistake has been made and needs to be put right, unfortunately it is not as easy as you may think. Banks take the credit ratings companies' word as gospel. Likewise, they trust the banks' word over yours. So if one gets something wrong, it is often the consumer who is left in the dark.
A frequent problem is if the address on your credit file does not match your address. This is often a problem if your house has a name, has a number and a letter, or is one of a number of flats converted from an older house. Find out how your local council lists your address and follow its lead. It is likely that most banks would use the same style that is on the electoral roll.
Experian say if you don't submit your address as Royal Mail lists it then it will not match up. In this case, contact Royal Mail on 0845 6011 110.
However, if you disagree with information on your credit report then you need to contact the credit rating company directly. But this can be a frustrating experience, since most complaints have to be sent by e-mail or by letter. Enables experienced IFA’s like to help you get all the details right first time to make sure you get the deals you need.
A frequent problem is if the address on your credit file does not match your address. This is often a problem if your house has a name, has a number and a letter, or is one of a number of flats converted from an older house. Find out how your local council lists your address and follow its lead. It is likely that most banks would use the same style that is on the electoral roll.
Experian say if you don't submit your address as Royal Mail lists it then it will not match up. In this case, contact Royal Mail on 0845 6011 110.
However, if you disagree with information on your credit report then you need to contact the credit rating company directly. But this can be a frustrating experience, since most complaints have to be sent by e-mail or by letter. Enables experienced IFA’s like to help you get all the details right first time to make sure you get the deals you need.
Tesco Bank Mortgage News
Enable of Bishop’s Stortford note with interest that the cheapest mortgage deals to hit the high street in years have recently been announced. Tesco has a two-year fixed-rate deal is priced at just 1.99pc. The supermarket bank said it was government funding that had enabled it to offer such a low deal. This “Funding for Lending” scheme was initially designed to help boost mortgage lending for first-time buyers.
As our experienced IFA’s at Enable would expect the Tesco deal is only available to those who have at least a 40pc deposit (or 40pc equity for those re-mortgaging). You don’t have to analyse the vast data or sources from its Clubcard scheme to know that this really isn’t the profile of your average first-time buyer.
It’s not the only bank that is using the funding to improve the mortgage deals available to those who already have sizeable equity in their home. As Sylvia Waycott from Moneyfacts pointed out: these borrowers already have access to cheap and plentiful lending. For those looking to borrow 90pc of their property – or less that are struggling – to date neither the availability of such home loans, nor their price has significantly improved.
There are huge amount of deals out there with varying criteria. If you want to be improving your current mortgage deal Enables IFA’s can help you find the best options. If you are a first time buyer we can help you cut to the chase and avoid frustration and disappointment.
As our experienced IFA’s at Enable would expect the Tesco deal is only available to those who have at least a 40pc deposit (or 40pc equity for those re-mortgaging). You don’t have to analyse the vast data or sources from its Clubcard scheme to know that this really isn’t the profile of your average first-time buyer.
It’s not the only bank that is using the funding to improve the mortgage deals available to those who already have sizeable equity in their home. As Sylvia Waycott from Moneyfacts pointed out: these borrowers already have access to cheap and plentiful lending. For those looking to borrow 90pc of their property – or less that are struggling – to date neither the availability of such home loans, nor their price has significantly improved.
There are huge amount of deals out there with varying criteria. If you want to be improving your current mortgage deal Enables IFA’s can help you find the best options. If you are a first time buyer we can help you cut to the chase and avoid frustration and disappointment.
First time buyers
Our independent financial advisors at Enable are specialists in finding the right borrowing to match your needs. We all know times are hard for first time buyers and that typically they are putting aside £248 a month towards their goal according to a new report by the Yorkshire Building Society. That means it could take them more than eight years to raise a 20pc deposit.
At Enable our experienced IFA’s know lenders have toughened their borrowing criteria in recent months, and more than one in 10 would-be buyers told Yorkshire's survey that they were worried about being accepted by a lender. The report found that, even with compound interest, those saving into a typical easy access account with an interest rate of 1.25pc would need eight years and six months to raise the typical deposit needed of just over £26,000.
Some 7pc of potential buyers plan to go to their parents for extra help, while 4pc said they are hoping an inheritance would plug their deposit gaps. Almost a fifth of first-time buyers who had bought a home in the last year told the study they had had help from the "bank of mum and dad" with their deposit, compared with 13pc of people who had bought a property five years ago.
However, someone who consistently shopped around to get a better rate of interest could cut the length of time it would take to save up, especially if you have the help of experienced IFA’s like Enable of Bishop's Stortford.
At Enable our experienced IFA’s know lenders have toughened their borrowing criteria in recent months, and more than one in 10 would-be buyers told Yorkshire's survey that they were worried about being accepted by a lender. The report found that, even with compound interest, those saving into a typical easy access account with an interest rate of 1.25pc would need eight years and six months to raise the typical deposit needed of just over £26,000.
Some 7pc of potential buyers plan to go to their parents for extra help, while 4pc said they are hoping an inheritance would plug their deposit gaps. Almost a fifth of first-time buyers who had bought a home in the last year told the study they had had help from the "bank of mum and dad" with their deposit, compared with 13pc of people who had bought a property five years ago.
However, someone who consistently shopped around to get a better rate of interest could cut the length of time it would take to save up, especially if you have the help of experienced IFA’s like Enable of Bishop's Stortford.
Wednesday, 17 October 2012
Children in Debt
Enable's Independent Financial Advisors know that many parents want to be able to help their children financially at the moment and lots of grown up children are still living at home. One of the problems that can arise is that young people living at your address might be terrible at paying their bills. This should not affect your credit rating however.
Contrary to popular belief, there is no such thing as an address with a bad credit history. Since 2004, credit reference agencies have changed the way they handle your details. Frequently, if someone with a similar name lives at your address, then a second stage of identification will have to be completed. The old information, dating back to before 1993, listing addresses with bad scores, has been wiped from the system. Credit scores are done specifically on your name, address and bank details. If someone else in your property has a particularly bad credit score, then it will not affect yours. However, it is worth checking to make sure their details have not accidentally slipped on to your record.
If a lender refuses you credit, it must say why. Under the Data Protection Act, if you are refused credit, and scoring was used to help the lender decide, you can ask for a review of your application.
This gives you the chance to review your rating and see where it may need improving. Alternatively, it gives you the chance to point out mistakes that may be on your record.
Contrary to popular belief, there is no such thing as an address with a bad credit history. Since 2004, credit reference agencies have changed the way they handle your details. Frequently, if someone with a similar name lives at your address, then a second stage of identification will have to be completed. The old information, dating back to before 1993, listing addresses with bad scores, has been wiped from the system. Credit scores are done specifically on your name, address and bank details. If someone else in your property has a particularly bad credit score, then it will not affect yours. However, it is worth checking to make sure their details have not accidentally slipped on to your record.
If a lender refuses you credit, it must say why. Under the Data Protection Act, if you are refused credit, and scoring was used to help the lender decide, you can ask for a review of your application.
This gives you the chance to review your rating and see where it may need improving. Alternatively, it gives you the chance to point out mistakes that may be on your record.
Personal Credit score
Enable's Independent Financial Advisors can help you work with your personal credit scores to make the most of your potential borrowing. Your basic credit score tells you very little and is pretty useless but it will be a number that indicates whether you are a good or bad payer of bills. For example, with Equifax, a score below 299 is very poor, 300-349 is poor, 350-399 is fair, 400-474 is good and above 475 is excellent. To get a better indication of how you can improve your credit score, you need to take out a more detailed credit report.
Many people complain they have never applied for any credit - and therefore had no credit problems – but have been rejected. The credit industry feels more comfortable dealing with people who have a track record of paying off credit so you do actually have more chance of making a successful application if, you have taken out a mortgage or loan previously.
Some basic ways of making sure you improve your credit rating involve making sure all your debts are registered to your correct name and current address. You should close credit cards you don't need and ensure there are no other mistakes on your file, such as other people's debts or payments.
One of the more alternative ways of boosting your rating includes taking store cards and paying off the balances on a regular basis. Opening a variety of accounts will speed up the process, but be sure to clear balances regularly to avoid sky-high interest charges.
Many people complain they have never applied for any credit - and therefore had no credit problems – but have been rejected. The credit industry feels more comfortable dealing with people who have a track record of paying off credit so you do actually have more chance of making a successful application if, you have taken out a mortgage or loan previously.
Some basic ways of making sure you improve your credit rating involve making sure all your debts are registered to your correct name and current address. You should close credit cards you don't need and ensure there are no other mistakes on your file, such as other people's debts or payments.
One of the more alternative ways of boosting your rating includes taking store cards and paying off the balances on a regular basis. Opening a variety of accounts will speed up the process, but be sure to clear balances regularly to avoid sky-high interest charges.
Getting Credit right
Independent Financial Advisors at Enable in Bishops Stortford see it as part of their role to help people find the right credit arrangements for the right parts of their financial journey through life. So it is with interest we note that for the first time in three years it is cheaper for European banks to access the credit markets than it is for the region's investment-grade corporates – “a dynamic that bodes well for the provision of credit to the wider economy”, say US bank Morgan Stanley in a report published recently.
How can this help us you might ask? The US bank said: "Not only can this help reduce systemic risk and if sustained over time ease the pace of deleveraging – it clearly can help wholesale banks’ business models." "This is fundamentally a good direction of travel and speaks to the dramatic reduction in perceived tail risks by ECB activity (first Long Term Refinancing Operation and then Outright Monetary Transactions), even if the central case for the economy looks poor."
In particular, it pointed to increased issuance from 'national champion' banks in Italy, France and Spain, but also some Yankee issuance from organisations like BNP Paribas, BVA and Crédit Agricole.
"This is not to say we are becoming blasé. The tenor of some of the deals we know is short. Second, banks are still and will continue to deleverage: senior bank funding issuance is down 25% this year." Said Morgan Stanley.
How can this help us you might ask? The US bank said: "Not only can this help reduce systemic risk and if sustained over time ease the pace of deleveraging – it clearly can help wholesale banks’ business models." "This is fundamentally a good direction of travel and speaks to the dramatic reduction in perceived tail risks by ECB activity (first Long Term Refinancing Operation and then Outright Monetary Transactions), even if the central case for the economy looks poor."
In particular, it pointed to increased issuance from 'national champion' banks in Italy, France and Spain, but also some Yankee issuance from organisations like BNP Paribas, BVA and Crédit Agricole.
"This is not to say we are becoming blasé. The tenor of some of the deals we know is short. Second, banks are still and will continue to deleverage: senior bank funding issuance is down 25% this year." Said Morgan Stanley.
Wednesday, 10 October 2012
Jobs (Source: The Office for National Statistics)
The latest unemployment rate in the UK continues to throw up anomalies against the poor Gross Domestic Product (GDP) figures recently released for Q2 2012.
Unemployment has continued to fall, confounding many market analysts, with the number of fulltime workers increasing by 102,000 on the previous quarter, up 0.5%. This represents the best figures since April 2009. Part-time workers also increased by 134,000 to a total of 8.12 million; this is the highest figure recorded since records began in 1992.
Overall, the unemployment rate for the three months to July 2012 was 8.1%, which is a reduction of 0.1% amounting to 2.59 million people. The flip side to these figures is that 71.2% of the workforce is currently in employment.
Those unemployed for over one year has increased by 22,000 from the previous quarter to 904,000, the highest figure since the quarter ending March 1996.
The youth jobs market (those between 16-24 years old) improved slightly in the three months to July 2012 with an additional 58,000 finding employment, but there remained 1.02 million of those unemployed representing 21.6%.
Those unemployed claiming Job Seekers Allowance also fell by 15,000 to 1.57 million between July and August 2012.
The disparity seen between the private and public sectors continues with private sector employment increasing by 471,000 from March 2012 to 23.9 million, whilst the public sector saw a decline of 235,000 people to 5.66 million.
Redundancies fell by 13,000 from the quarter ending April 2012 and down 20,000 from a year earlier. Therefore the redundancy rate was 5.7 per 1,000 employees, again down 0.5 on the previous quarter and 0.8 on the year earlier.
Total pay saw an increase of 1.5% with average total pay (including bonuses) being £471 per week. Average regular pay (excluding bonuses) was recorded at £443 per week.
So in brief…
Unemployment continues to fall
All eyes still on the Eurozone...
Unemployment has continued to fall, confounding many market analysts, with the number of fulltime workers increasing by 102,000 on the previous quarter, up 0.5%. This represents the best figures since April 2009. Part-time workers also increased by 134,000 to a total of 8.12 million; this is the highest figure recorded since records began in 1992.
Overall, the unemployment rate for the three months to July 2012 was 8.1%, which is a reduction of 0.1% amounting to 2.59 million people. The flip side to these figures is that 71.2% of the workforce is currently in employment.
Those unemployed for over one year has increased by 22,000 from the previous quarter to 904,000, the highest figure since the quarter ending March 1996.
The youth jobs market (those between 16-24 years old) improved slightly in the three months to July 2012 with an additional 58,000 finding employment, but there remained 1.02 million of those unemployed representing 21.6%.
Those unemployed claiming Job Seekers Allowance also fell by 15,000 to 1.57 million between July and August 2012.
The disparity seen between the private and public sectors continues with private sector employment increasing by 471,000 from March 2012 to 23.9 million, whilst the public sector saw a decline of 235,000 people to 5.66 million.
Redundancies fell by 13,000 from the quarter ending April 2012 and down 20,000 from a year earlier. Therefore the redundancy rate was 5.7 per 1,000 employees, again down 0.5 on the previous quarter and 0.8 on the year earlier.
Total pay saw an increase of 1.5% with average total pay (including bonuses) being £471 per week. Average regular pay (excluding bonuses) was recorded at £443 per week.
So in brief…
Unemployment continues to fall
All eyes still on the Eurozone...
Latest Market news: (Data compiled by The Outsourced Marketing Department)
With the equity markets still closely following developments in the Eurozone, the mixed messages coming out of Spain and Germany resulted in a lively monthly session.
The UK’s FTSE100 had gained over 3.5% at the mid-point in the month
to stand at 5,915.5, however, the Spanish economy’s continuing weakness coupled with the prospect of them having to request a bail-out from the EU, meant it fell back later to end the month on 5,742.1, up only a modest 0.54%. It now sits at -11.94% against its long term trend. The FTSE250 fared a little better gaining 2.84% on the month and finishing at 11,734.1. The AIM also did well closing September on 705.76 or up 3.66%.
American markets remained more resilient with the Dow Jones closing on 13,437.13 up 2.65% and the Nasdaq up 1.61% at 3,116.23. Mirroring the movements of the FTSE100 the Eurostoxx50 closed relatively flat at 2,454.26 or up 0.56%. In Japan the Nikkei ended the month on 8,870.16 to show a rise of 0.34%.
Currencies also followed the Eurozone news with sterling finishing at $1.61, up a modest 1.5% against the greenback and at €1.252 against the euro, a dip of 0.87%. The euro itself ended the session on $1.29 against the US$.
Gold continued to glitter, with bullish sentiment and forecasts for the precious metal pushing the price up again for the fourth straight month, finishing September on $1,772.04. This represents a 15.7% appreciation so far this calendar year, but is still below its September 2011 peak of $1,921.
On the oil markets Brent Crude saw little change during the month ending on $112.39.
Enable's monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future.
It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements.
The UK’s FTSE100 had gained over 3.5% at the mid-point in the month
to stand at 5,915.5, however, the Spanish economy’s continuing weakness coupled with the prospect of them having to request a bail-out from the EU, meant it fell back later to end the month on 5,742.1, up only a modest 0.54%. It now sits at -11.94% against its long term trend. The FTSE250 fared a little better gaining 2.84% on the month and finishing at 11,734.1. The AIM also did well closing September on 705.76 or up 3.66%.
American markets remained more resilient with the Dow Jones closing on 13,437.13 up 2.65% and the Nasdaq up 1.61% at 3,116.23. Mirroring the movements of the FTSE100 the Eurostoxx50 closed relatively flat at 2,454.26 or up 0.56%. In Japan the Nikkei ended the month on 8,870.16 to show a rise of 0.34%.
Currencies also followed the Eurozone news with sterling finishing at $1.61, up a modest 1.5% against the greenback and at €1.252 against the euro, a dip of 0.87%. The euro itself ended the session on $1.29 against the US$.
Gold continued to glitter, with bullish sentiment and forecasts for the precious metal pushing the price up again for the fourth straight month, finishing September on $1,772.04. This represents a 15.7% appreciation so far this calendar year, but is still below its September 2011 peak of $1,921.
On the oil markets Brent Crude saw little change during the month ending on $112.39.
Enable's monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future.
It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements.
We are saving more, especially the women
In the latest survey from National Savings and Investments (NS&I) it is reported that we are saving more as a nation, although still not as much as we did in the winter of 2011/12.
We are now saving 7.17% of our disposable income each month or £90 in real terms. This is an increase from the 7.08% recorded in the previous quarter.
It is interesting to note that the 25-34 year olds lead the way by saving significantly more than the average, at £103 a month or 8%, which is itself an increase from the previously reported 7.24% for this group. Also, women appear more thrifty than men in this respect, with women saving 7.65% of income against the men’s average of only 6.82%.
One of the factors affecting these results is that over 50% of women appear to set savings goals on a regular basis and feel rewarded when these are met. Men are less likely to use this strategy, as only 41% reported doing so.
Other statistics emerging from the report are that the Scots save 7.35% or £95 a month and the Welsh 7.7% or £87 in real terms, due to lower average wages in this region.
The NS&I Retail Customer Director, John Prout, was quoted as saying: “It is encouraging to see this improvement in over recent months, and it’s particularly good to see such motivation from younger people. Setting goals is an effective way to get into a regular savings habit. Not only do they encourage people to save, they provide a real sense of achievement once a goal has been reached.”
Enable's monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future.
It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements.
We are now saving 7.17% of our disposable income each month or £90 in real terms. This is an increase from the 7.08% recorded in the previous quarter.
It is interesting to note that the 25-34 year olds lead the way by saving significantly more than the average, at £103 a month or 8%, which is itself an increase from the previously reported 7.24% for this group. Also, women appear more thrifty than men in this respect, with women saving 7.65% of income against the men’s average of only 6.82%.
One of the factors affecting these results is that over 50% of women appear to set savings goals on a regular basis and feel rewarded when these are met. Men are less likely to use this strategy, as only 41% reported doing so.
Other statistics emerging from the report are that the Scots save 7.35% or £95 a month and the Welsh 7.7% or £87 in real terms, due to lower average wages in this region.
The NS&I Retail Customer Director, John Prout, was quoted as saying: “It is encouraging to see this improvement in over recent months, and it’s particularly good to see such motivation from younger people. Setting goals is an effective way to get into a regular savings habit. Not only do they encourage people to save, they provide a real sense of achievement once a goal has been reached.”
Enable's monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future.
It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements.
UK funding for business is now on course
In a two-pronged initiative the coalition government has announced the creation of a new ‘British Business Bank’; an entity that will initially be funded with £1bn of taxpayers’ money and, hopefully, a larger private sector contribution in due course.
The brief for this Business Bank will be to offer funding to small and medium-sized businesses and “get behind” good firms who are currently struggling to
receive financing from the high street banks.
It is hoped that the Business Bank will operate via the existing lenders and start
disbursing funds within 18 months. It has not been made clear, however, exactly where the state funding will come from and we will have to wait until the Chancellor’s autumn statement on December 5th for the details.
Any disbursements will be in the form of equity stakes or guarantees; therefore, they will sit on the balance sheet of the recipient businesses and not be reclaimed by the government. Vince Cable, the business secretary, stated that
there is, however, a chance they could generate a return for the taxpayer in the long run.
The second string to this initiative is the previously announced Funding for Lending scheme (FLS), which is also designed to make cheaper loans available to businesses and individual entrepreneurs.
In an announcement in late September, five of the largest banks in the UK have agreed to participate in this scheme, which means that thirteen banks and building societies have now signed up. Together they will represent 73% of the
lending market, worth approximately £1.2 trillion. Only HSBC has declined to take part, as it states that it does not require the additional funding.
The participating banks and building societies will be able to borrow 5% of their loan books straight away and increase this percentage if certain criteria are met.
They will be charged a minimal 0.25% interest on these funds, provided that they increase their overall lending as a result. Should they decrease their lending, then they will be charged 1.5% by the by the Bank of England.
The UK taxpayer and the Bank of England will be covered against any possible losses, as the borrowing banks and institutions will have to lodge collateral with the Bank of a higher value than the loans offered.
Given their current lending figures, this could result in an additional £60bn being made available from the Bank of England for them to lend on to businesses at more competitive rates. news on inflation front SME’s get funding window
The Bank of England’s executive director for markets, Paul Fisher, commenting on this announcement said a: “significant number” of additional building societies and banks were considering joining the scheme. He went on to add: “I am confident that the FLS will help the supply of credit.
Before its introduction, it was more likely than not that the stock of credit would contract further over the next 18 months.”
The brief for this Business Bank will be to offer funding to small and medium-sized businesses and “get behind” good firms who are currently struggling to
receive financing from the high street banks.
It is hoped that the Business Bank will operate via the existing lenders and start
disbursing funds within 18 months. It has not been made clear, however, exactly where the state funding will come from and we will have to wait until the Chancellor’s autumn statement on December 5th for the details.
Any disbursements will be in the form of equity stakes or guarantees; therefore, they will sit on the balance sheet of the recipient businesses and not be reclaimed by the government. Vince Cable, the business secretary, stated that
there is, however, a chance they could generate a return for the taxpayer in the long run.
The second string to this initiative is the previously announced Funding for Lending scheme (FLS), which is also designed to make cheaper loans available to businesses and individual entrepreneurs.
In an announcement in late September, five of the largest banks in the UK have agreed to participate in this scheme, which means that thirteen banks and building societies have now signed up. Together they will represent 73% of the
lending market, worth approximately £1.2 trillion. Only HSBC has declined to take part, as it states that it does not require the additional funding.
The participating banks and building societies will be able to borrow 5% of their loan books straight away and increase this percentage if certain criteria are met.
They will be charged a minimal 0.25% interest on these funds, provided that they increase their overall lending as a result. Should they decrease their lending, then they will be charged 1.5% by the by the Bank of England.
The UK taxpayer and the Bank of England will be covered against any possible losses, as the borrowing banks and institutions will have to lodge collateral with the Bank of a higher value than the loans offered.
Given their current lending figures, this could result in an additional £60bn being made available from the Bank of England for them to lend on to businesses at more competitive rates. news on inflation front SME’s get funding window
The Bank of England’s executive director for markets, Paul Fisher, commenting on this announcement said a: “significant number” of additional building societies and banks were considering joining the scheme. He went on to add: “I am confident that the FLS will help the supply of credit.
Before its introduction, it was more likely than not that the stock of credit would contract further over the next 18 months.”
Inflation dipped in August
Inflation dipped in August continuing a positive trend, UK price rises were trimmed in August, compared to the previous month, according to the Office for National Statistics (ONS).
Both the Consumer Prices Index (CPI) and the Retail Prices Index (RPI) – which also includes housing costs – measures fell during the month, with the CPI change dipping to 2.5% in August, against 2.6% recorded in the previous month and the RPI movement showing a drop to 2.9% from 3.2% in July.
The ONS stated that factors behind the fall in the CPI were smaller rises in gas prices and furniture costs. Whilst reporting this data, the ONS also said that they will be consulting on possible changes to their RPI calculation methods between the 8th of October and the 30th of November this year.
Given that CPI inflation peaked at 5.2% in September 2011, these new figures are good news for consumers, the Bank of England, who have been set a target of 2%, and the Government. The expected drop in demand in the UK economy should result in inflation continuing to decline towards this 2% target in the short term.
This said, the ONS did warn that there remain a few factors that may put upward pressure on prices. Mr Richard Campbell, an ONS director, was quoted as saying:
“Some of the utility companies are talking about price increases in the next few months, while there have been reports of poor harvests in many parts of the world, which could possibly have an impact on food prices.
“Finally, if the oil price continues to go up, we expect that to feed through to petrol and diesel prices.”
With the UK economy having contracted over the past three quarters and the Bank of England’s additional Quantitative Easing (QE) programme worrying analysts that it would stoke inflationary pressure, these lower CPI and RPI figures eased their concerns in this regard.
Our monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future.
It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements.
Both the Consumer Prices Index (CPI) and the Retail Prices Index (RPI) – which also includes housing costs – measures fell during the month, with the CPI change dipping to 2.5% in August, against 2.6% recorded in the previous month and the RPI movement showing a drop to 2.9% from 3.2% in July.
The ONS stated that factors behind the fall in the CPI were smaller rises in gas prices and furniture costs. Whilst reporting this data, the ONS also said that they will be consulting on possible changes to their RPI calculation methods between the 8th of October and the 30th of November this year.
Given that CPI inflation peaked at 5.2% in September 2011, these new figures are good news for consumers, the Bank of England, who have been set a target of 2%, and the Government. The expected drop in demand in the UK economy should result in inflation continuing to decline towards this 2% target in the short term.
This said, the ONS did warn that there remain a few factors that may put upward pressure on prices. Mr Richard Campbell, an ONS director, was quoted as saying:
“Some of the utility companies are talking about price increases in the next few months, while there have been reports of poor harvests in many parts of the world, which could possibly have an impact on food prices.
“Finally, if the oil price continues to go up, we expect that to feed through to petrol and diesel prices.”
With the UK economy having contracted over the past three quarters and the Bank of England’s additional Quantitative Easing (QE) programme worrying analysts that it would stoke inflationary pressure, these lower CPI and RPI figures eased their concerns in this regard.
Our monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future.
It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements.
Tuesday, 2 October 2012
Cashback cards...
Enable’s Independent Financial Advisors know that looking after the pennies really does help you look after the pounds, every little helps along the way with Financial planning. Even if living costs were not high and likely to rise, we would always encourage UK household to be a little more creative when it comes to their finances.
In an ideal world you should always pay off your credit card balance every month and if you do pay off your credit card balance in full every month, you should maybe consider taking advantage of one of the many cards which reward you for your spending. Recently there has been the launch of several generous cash back and reward credit cards which offer loyalty points or a monetary bonus every time you buy something using the card.
Some cards offer points which can be redeemed against flights, while others provide points which you can use to get money off your shopping at certain shops. Alternatively you can simply opt for a cashback card, and get a percentage of everything you spend knocked off your balance. Certain cards will pay you the same amount of cashback regardless of where you are shopping, whereas other cards offer different cashback rates depending on where you use the card.
These cards are a no-brainer if you clear your balance without fail every month, as you are effectively getting something for nothing. Creative financial advice from Enable of Bishop’s Stortford is what our IFA’s are all about.
What is the cost of credit?
Once the kids have left home, even got that university education and hopefully an interesting job in their chosen field then it’s the dreaded deposit for their first home. Enable’s Independent Financial Advisors come across many families who are trying to support their children get that firs foot on the ladder but it’s wise to help the children have as much of an understanding of financial planning a s possible.
Ironically for many youngsters the lack of credit history can be a bit of a stumbling block. They may even have healthy finances and you might have always been in the black but if they have never had their own phone contact or paid a utility bill or used a credit card they may have little or no credit history. Never having had a credit history makes you a poorer candidate for a mortgage than someone who has three credit cards and pays the minimum amount each month.
Banks want to see they repayments can be managed overtime before they take the risk and loan money particularly on first properties so it is important to build up a credit history. So as well as saving to support your children experienced IFA's like those at Enable would also suggest allowing your children to build up a credit history with their won bank account that manages sensible and regular payments say on phones or credit cards. Learning about credit history is an invaluable life lesson to teach them alongside how to manage their finances.
Ironically for many youngsters the lack of credit history can be a bit of a stumbling block. They may even have healthy finances and you might have always been in the black but if they have never had their own phone contact or paid a utility bill or used a credit card they may have little or no credit history. Never having had a credit history makes you a poorer candidate for a mortgage than someone who has three credit cards and pays the minimum amount each month.
Banks want to see they repayments can be managed overtime before they take the risk and loan money particularly on first properties so it is important to build up a credit history. So as well as saving to support your children experienced IFA's like those at Enable would also suggest allowing your children to build up a credit history with their won bank account that manages sensible and regular payments say on phones or credit cards. Learning about credit history is an invaluable life lesson to teach them alongside how to manage their finances.
So how much does it cost to bring up a child?
Apparently the current average cost of raising a child till their 21st birthday no stands at more than £218, 000. Try doubling let alone trebling that sum and it can seem a bit daunting. Independent Financial Advisors Enable are experts in helping you make the most of your earnings and savings, putting in place financial plans to help you cope with the stresses and strains of family life.
It would seem childcare and education are the biggest cost to parents according to LV’s Cost Of a Child Survey. Childcare coming in at £71780 and education at £62 099. IFA's like Enable can help you plan for managing these costs but one of the first things you should do when starting a family is make sure you are receiving any of the benefits you are entitled to. Child benefit for example is for parents with dependents up to 16 or until the age of 20 if in fulltime education. It is about £20 a week for your fist and slightly less for subsequent children, although every child will be entitled to some benefit. But remember families earning more than £50,000 p.a will not be entitled to the full amount and those on £60,000 or more will stop getting any child benefit in 2013.
Whether or not your family is entitled to child benefit Enable's Independent Financial Advisors can try and help you get maximum benefit from you finances for your family.
It would seem childcare and education are the biggest cost to parents according to LV’s Cost Of a Child Survey. Childcare coming in at £71780 and education at £62 099. IFA's like Enable can help you plan for managing these costs but one of the first things you should do when starting a family is make sure you are receiving any of the benefits you are entitled to. Child benefit for example is for parents with dependents up to 16 or until the age of 20 if in fulltime education. It is about £20 a week for your fist and slightly less for subsequent children, although every child will be entitled to some benefit. But remember families earning more than £50,000 p.a will not be entitled to the full amount and those on £60,000 or more will stop getting any child benefit in 2013.
Whether or not your family is entitled to child benefit Enable's Independent Financial Advisors can try and help you get maximum benefit from you finances for your family.
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