Your pension scheme will have to ensure that it meets all of the minimum requirements; that is has a valid contracting-out certificate, or that it provides a broadly equivalent benefits which are given in a contracted-out.
If you are in a defined contribution scheme then you will be able to get tax relief as a percentage of your earnings. This means that money that would have previously gone to into tax will now go into your pension. Under the new pension changes the government has set a minimum percentage that has to be contributed in total, these contributions will come from you, your employer and from the tax relief and will be worked out as a percentage of your earnings.
Timings: Minimum Total Percentage that has to go into your pot:
October 2012 to September 2017 2%
October 2017 to September 2018 5%
October 2018 onwards 8%
Contributions to the pension scheme can exceed this minimum. Within that total contribution, the government has also set a minimum percentage that has to be contributed by the employer. This will also increase gradually over time.
Timings: Minimum that has to be contributed by the employer:
October 2012 to September 2017 1%
October 2017 to September 2018 2%
October 2018 onwards 3%
Employers will be able to contribute more than the minimum if they wish; many already do.
These minimum percentages do not apply to all of your salary, but on what you earn over a minimum (currently £5,564) up to a maximum limit (currently £42,475).
This is just a basic summary of the scheme and we would recommend you speak to an IFA to find out exactly what these new changes will mean to you.
Wednesday, 30 January 2013
Auto-enroll pensions and what they mean to you…
At Enable Independent, IFA’s in Bishop’s Stortford we have been making sure that we keep ahead of the biggest shake up we have seen to the Pension scheme for decades.
So what does it mean to you? Basically the government have made it compulsory for all employers to enroll their employees into a qualifying workplace scheme, as before it was voluntary, and workers who did not subscribe to the schemes have been missing out on pension benefits.
Employers now (since October 2012) will have to automatically enroll workers on a qualifying workplace pension scheme, if you are at last 22 years old, below the state pension age, earning more than £8,105 per year and if you work in the UK. Although if you do not come under one of these categories, you can still ask your employer to enroll you onto the scheme. However the duties will be introduced gradually over the next five years, and will be based on the size of the company as well.
If you already in a final salary scheme and meets the minimum standards the you will be able to continue to build up benefits with in the scheme as usual.
So what happens if you have previously opted out of a company pension scheme?
If you have opted out of a company pension scheme you can rejoin when ever you like, as long as you fit into one of the categories we have listed above.
In our next blog entry we will be discussing how much will be paid into your pension pot? But in the meantime if you have any other questions regarding the new changes to pensions, then please give our team a call and one of our IFA’s will be more than happy to have an informal chat with you, so give us a call on 01279 755950.
This information is purely intended as guidance and therefore if you require any specific advice please Enable Independent directly for independent financial advice.
So what does it mean to you? Basically the government have made it compulsory for all employers to enroll their employees into a qualifying workplace scheme, as before it was voluntary, and workers who did not subscribe to the schemes have been missing out on pension benefits.
Employers now (since October 2012) will have to automatically enroll workers on a qualifying workplace pension scheme, if you are at last 22 years old, below the state pension age, earning more than £8,105 per year and if you work in the UK. Although if you do not come under one of these categories, you can still ask your employer to enroll you onto the scheme. However the duties will be introduced gradually over the next five years, and will be based on the size of the company as well.
If you already in a final salary scheme and meets the minimum standards the you will be able to continue to build up benefits with in the scheme as usual.
So what happens if you have previously opted out of a company pension scheme?
If you have opted out of a company pension scheme you can rejoin when ever you like, as long as you fit into one of the categories we have listed above.
In our next blog entry we will be discussing how much will be paid into your pension pot? But in the meantime if you have any other questions regarding the new changes to pensions, then please give our team a call and one of our IFA’s will be more than happy to have an informal chat with you, so give us a call on 01279 755950.
This information is purely intended as guidance and therefore if you require any specific advice please Enable Independent directly for independent financial advice.
Good news for the housing market…
Enable Independent, IFA’s in Bishop’s Stortford were pleased to see that house sales rose by 5% last year, according to HM Revenue and Customs.
Completed house sales went up from 888,000 in 2011 to 932,000 in 2012, the highest we have seen in the UK since the recession begun in 2007.
Indications from different sources indicate that the housing market will continue to grow throughout 2013, in terms of sales not prices.
HMRC are not the only body that feels as though the market is showing green shoots:
In January the Bank of England revealed that their survey found that lending had risen in the last three months of 2012, and they felt that they would rise significantly in the first quarter of this year.
The Bank have also revealed that the number of mortgages approved for buyers, but not lent rose to 54,036, which is the highest figure since 2009.
The Council of Mortgage Lenders (CML) reported that loans to first-time buyers rose by 8% in November, also the highest for nearly three years.
RICS, who keep monthly produce monthly surveys, have said that estate agents are feeling very positive about 2013.
Simon Rubinsohn, Chief Economist at RICS stated: "What we have had is a decent recovery in the second half of the year, helped by a little more confidence due to the FLS, which has helped give a bit more accessibility to mortgage funds," he said.
"We think there will be a further increase in activity, with the FLS providing further support along with the government's NewBuy scheme."
If you are looking at buying a home in 2013, and need to apply for finance, Enable Independent can choose from any mortgage across the market place and we make sure all of our charges are transparent. We have years of experience of obtaining mortgages for all different types of customers from first time buyers to people wanting to re-mortgage. Why not give our friendly team of mortgage advisors a call on : 01279 755950.
Completed house sales went up from 888,000 in 2011 to 932,000 in 2012, the highest we have seen in the UK since the recession begun in 2007.
Indications from different sources indicate that the housing market will continue to grow throughout 2013, in terms of sales not prices.
HMRC are not the only body that feels as though the market is showing green shoots:
In January the Bank of England revealed that their survey found that lending had risen in the last three months of 2012, and they felt that they would rise significantly in the first quarter of this year.
The Bank have also revealed that the number of mortgages approved for buyers, but not lent rose to 54,036, which is the highest figure since 2009.
The Council of Mortgage Lenders (CML) reported that loans to first-time buyers rose by 8% in November, also the highest for nearly three years.
RICS, who keep monthly produce monthly surveys, have said that estate agents are feeling very positive about 2013.
Simon Rubinsohn, Chief Economist at RICS stated: "What we have had is a decent recovery in the second half of the year, helped by a little more confidence due to the FLS, which has helped give a bit more accessibility to mortgage funds," he said.
"We think there will be a further increase in activity, with the FLS providing further support along with the government's NewBuy scheme."
If you are looking at buying a home in 2013, and need to apply for finance, Enable Independent can choose from any mortgage across the market place and we make sure all of our charges are transparent. We have years of experience of obtaining mortgages for all different types of customers from first time buyers to people wanting to re-mortgage. Why not give our friendly team of mortgage advisors a call on : 01279 755950.
Thursday, 24 January 2013
Save tax by investing your savings into an ISA before the 6 April
Isa's: what they are and how to get one?
Isa stands for Individual savings account, this is a tax-efficient way to save or invest. If you are looking to invest in an Isa this year you need to do so before the 6 April 2013.
The big ISA benefits are:
For the 2012-13 tax year you can make a miximum of £5,640 into a cash Isa or £11,280 into a stocks and shares Isa, or you can mix and match, investing a bit in both types of Isas. This amount is for each person, so if you are a couple you can invest as much as £22,560 in Isas in each tax year.
From the 6th of April this year, the Isa limit will be incrased to £5,760 and £11,520 respectively.
This is a tax-efficient way to save or invest, with no tax liability when the proceeds are withdrawn. Plus the government have stated that they have no plans to withdraw Isa's in the future.
If you need some help investing in an Isa, then why not give Enable a call on 01279 755950
Isa stands for Individual savings account, this is a tax-efficient way to save or invest. If you are looking to invest in an Isa this year you need to do so before the 6 April 2013.
The big ISA benefits are:
- No personal tax (income or capital gains) on any investments in an ISA.
- Income and gains from ISAs do not need to be included in tax returns.
- Money can be withdrawn from an ISA at any time without losing the tax breaks.
For the 2012-13 tax year you can make a miximum of £5,640 into a cash Isa or £11,280 into a stocks and shares Isa, or you can mix and match, investing a bit in both types of Isas. This amount is for each person, so if you are a couple you can invest as much as £22,560 in Isas in each tax year.
From the 6th of April this year, the Isa limit will be incrased to £5,760 and £11,520 respectively.
This is a tax-efficient way to save or invest, with no tax liability when the proceeds are withdrawn. Plus the government have stated that they have no plans to withdraw Isa's in the future.
If you need some help investing in an Isa, then why not give Enable a call on 01279 755950
Tax Dodgers beware…
Enable Independent, Ifa’s in Bishop’s Stortford are pleased to see that HMRC are taking a hard line with tax dodgers, they made 550 tax convictions in 2011/12.
Since the HMRC merged with the Crown Prosecution Service they have created a much larger team to deal with tax evaders, saying that it will increase the number of prosecutions by fivefold over the next four years.
Mr Starmer, Director of Public Prosecutions told the BBC Radio 4: "It is, of course, always important to prosecute tax evasion but never more so than in this sort of hardship we find ourselves in now. There are people really suffering who are paying their taxes. I think it is important for a prosecution service to respond to public concern, to be seen to be in tune with what ordinary people think ought to happen and to gain the confidence of people that we are prosecuting good cases properly."
He continued: "There's a difference between tax avoidance and tax evasion and we are concerned here with tax evasion, which includes an element of fraud, of dishonesty.
"But that having been said, the heart of the ramping-up is not only the increase in volume that's already been referred to but also a demonstrability to prosecute highly complex dishonest tax avoidance schemes.
"So, big tax avoidance schemes if they are dishonest will be prosecuted. The way that tax evasion is dealt with is really a matter for Her Majesty's Revenue and Customs. They have got a range of powers and abilities.
"What this demonstrates is that the number of cases prosecuted is going to go up. We are talking about a five-fold ramping-up over a four-year period so it is a significant increase intended to make clear that in hard economic times, when law-abiding taxpayers are suffering real hardship, it's important to prosecute these cases."
Since the HMRC merged with the Crown Prosecution Service they have created a much larger team to deal with tax evaders, saying that it will increase the number of prosecutions by fivefold over the next four years.
Mr Starmer, Director of Public Prosecutions told the BBC Radio 4: "It is, of course, always important to prosecute tax evasion but never more so than in this sort of hardship we find ourselves in now. There are people really suffering who are paying their taxes. I think it is important for a prosecution service to respond to public concern, to be seen to be in tune with what ordinary people think ought to happen and to gain the confidence of people that we are prosecuting good cases properly."
He continued: "There's a difference between tax avoidance and tax evasion and we are concerned here with tax evasion, which includes an element of fraud, of dishonesty.
"But that having been said, the heart of the ramping-up is not only the increase in volume that's already been referred to but also a demonstrability to prosecute highly complex dishonest tax avoidance schemes.
"So, big tax avoidance schemes if they are dishonest will be prosecuted. The way that tax evasion is dealt with is really a matter for Her Majesty's Revenue and Customs. They have got a range of powers and abilities.
"What this demonstrates is that the number of cases prosecuted is going to go up. We are talking about a five-fold ramping-up over a four-year period so it is a significant increase intended to make clear that in hard economic times, when law-abiding taxpayers are suffering real hardship, it's important to prosecute these cases."
The poorest could be saving £200m in tax...
Enable Independent, IFA’s in Bishop’s Stortford were disappointed to read the recent stats which show that some of the poorest people in the UK could be saving approximately £200m per year on tax.
The research was completed by the Low Income Tax Reform Group (LITRG) who have stated that only 1 in 10 banks and building socities have informed their customers of ways in which they can have interest-free tax savings, if they earn under the capped amount, listed below.
Here is a summary of how much you can receive before paying tax in your account:
• If you are aged 65 or less (this includes children) you can receive up to £8,105 in the tax year ending on April 5, 2013, without having to pay tax.
• If you are aged 65 but less than 75 you can receive up to £10,500, in the tax year ending on April 5, 2013, without having to pay tax.
• If you are aged 75 or over you have a personal allowance of £10,660.
If you have money in the bank you receive interest on it then the bank or building society will normally pass on the tax to HMRC. However if you feel as though you should not be paying tax on the interest you can apply to have their savings paid to them in gross, so that will not have any tax deducted – using an R85 form. You can download your R85 form here www.hmrc.gov.uk/forms/r85.pdf
Many people don’t realise you can claim the tax back, so loose out on claiming the money back. If you haven’t claimed yours back then don’t worry as you have four years where you can claim back from this tax year.
Anthony Thomas, chairman of the LITRG, said: “Millions of people are overpaying income tax because they are incorrectly paying tax on their bank and building society interest. These are some of the poorest people in the country, with incomes below the income tax threshold.
“HMRC, banks and building societies all need to do more to publicise the form R85 procedure and when it is appropriate for an individual to apply for their interest to be paid gross.
“HMRC should be more proactive in obtaining information about interest payments from financial institutions, enabling them to reconcile data to individuals’ tax records and automatically issue repayments where appropriate. Now is the ideal time to be considering this, facilitated by improvements in technology.”
If you would like help to make sure you are getting the most out of your savings then why not contact your local professional Independent Financial Advisors, Enable on 01279 755950.
The research was completed by the Low Income Tax Reform Group (LITRG) who have stated that only 1 in 10 banks and building socities have informed their customers of ways in which they can have interest-free tax savings, if they earn under the capped amount, listed below.
Here is a summary of how much you can receive before paying tax in your account:
• If you are aged 65 or less (this includes children) you can receive up to £8,105 in the tax year ending on April 5, 2013, without having to pay tax.
• If you are aged 65 but less than 75 you can receive up to £10,500, in the tax year ending on April 5, 2013, without having to pay tax.
• If you are aged 75 or over you have a personal allowance of £10,660.
If you have money in the bank you receive interest on it then the bank or building society will normally pass on the tax to HMRC. However if you feel as though you should not be paying tax on the interest you can apply to have their savings paid to them in gross, so that will not have any tax deducted – using an R85 form. You can download your R85 form here www.hmrc.gov.uk/forms/r85.pdf
Many people don’t realise you can claim the tax back, so loose out on claiming the money back. If you haven’t claimed yours back then don’t worry as you have four years where you can claim back from this tax year.
Anthony Thomas, chairman of the LITRG, said: “Millions of people are overpaying income tax because they are incorrectly paying tax on their bank and building society interest. These are some of the poorest people in the country, with incomes below the income tax threshold.
“HMRC, banks and building societies all need to do more to publicise the form R85 procedure and when it is appropriate for an individual to apply for their interest to be paid gross.
“HMRC should be more proactive in obtaining information about interest payments from financial institutions, enabling them to reconcile data to individuals’ tax records and automatically issue repayments where appropriate. Now is the ideal time to be considering this, facilitated by improvements in technology.”
If you would like help to make sure you are getting the most out of your savings then why not contact your local professional Independent Financial Advisors, Enable on 01279 755950.
Wednesday, 16 January 2013
Bank of England to prevent boom and bust…
Enable Independent, Independent Financial Advisors in Bishop’s Stortford were pleased to see that the Bank of England have expressed that they are ready to take aggressive action against UK lenders to protect the UK from a boom and bust economy.
The Financial Policy Committee, who were set up to safeguard the stability of the banking system, published a draft policy covering the powers it will have when it launches in April this year.
The Committee will have the authority to stop banks from issuing large mortgages or commercial property loans to increase their defenses in the good times to absorb losses in an economical downturn.
This type of regulation will be controversial as it increases the cost of mortgages and will make it difficult for would-be buyers to get the funds they need to get on the first run of the ladder.
However the Bank have stated that better regulation will lead to a decline in bad loans and will help prevent the sort of property booms and busts.
There are some indications of the housing market slowly improving. A survey carried out by e.surv, showed that 2012 was the best year for mortgage lending since 2007, and lending to first time buyers was up by 11 per cent.
The Financial Policy Committee, who were set up to safeguard the stability of the banking system, published a draft policy covering the powers it will have when it launches in April this year.
The Committee will have the authority to stop banks from issuing large mortgages or commercial property loans to increase their defenses in the good times to absorb losses in an economical downturn.
This type of regulation will be controversial as it increases the cost of mortgages and will make it difficult for would-be buyers to get the funds they need to get on the first run of the ladder.
However the Bank have stated that better regulation will lead to a decline in bad loans and will help prevent the sort of property booms and busts.
There are some indications of the housing market slowly improving. A survey carried out by e.surv, showed that 2012 was the best year for mortgage lending since 2007, and lending to first time buyers was up by 11 per cent.
Watchdog force gyms to stop unfair joining terms…
Enable Independent IFA’s of Bishop’s Stortford were really pleased to see that Watchdog is cracking down on Gyms tie in policies for customers across the UK.
At this time of year many people join the gym to get fit, but are not made aware of the terms and conditions of their contracts, and so they often get locked into a two years contract, even if they are not using the gym.
The Office of Fair trading has taken one company, Ashbourne Management, who draws up agreements and collects payments from 700 gyms across the UK to court, over unfair terms, and they have also put many other gyms on notice to make their terms and conditions clearer.
OFT spokesman Cavendish Elithorn said: ‘We are investigating a number of companies that operate fitness club chains or provide management services to gyms over concerns about unfair terms or business practices.
‘These include tying consumers into lengthy terms with limited rights to cancel should their circumstances change, and using misleading debt collection practices.’
The judge ruled that Ashbourne Management’s gym contract was unfair as it ties people into a contract for longer than 12 months and allow the consumer to cancel with 30 days notice, without a huge financial penalty.
In light of these changes several gyms have cut their contracts to a maximum of 12 months. If you are considering a gym membership why not look around for one that offers a rolling contract, where you can cancel at any time, such as Just Gyms in Saffron Walden.
At this time of year many people join the gym to get fit, but are not made aware of the terms and conditions of their contracts, and so they often get locked into a two years contract, even if they are not using the gym.
The Office of Fair trading has taken one company, Ashbourne Management, who draws up agreements and collects payments from 700 gyms across the UK to court, over unfair terms, and they have also put many other gyms on notice to make their terms and conditions clearer.
OFT spokesman Cavendish Elithorn said: ‘We are investigating a number of companies that operate fitness club chains or provide management services to gyms over concerns about unfair terms or business practices.
‘These include tying consumers into lengthy terms with limited rights to cancel should their circumstances change, and using misleading debt collection practices.’
The judge ruled that Ashbourne Management’s gym contract was unfair as it ties people into a contract for longer than 12 months and allow the consumer to cancel with 30 days notice, without a huge financial penalty.
In light of these changes several gyms have cut their contracts to a maximum of 12 months. If you are considering a gym membership why not look around for one that offers a rolling contract, where you can cancel at any time, such as Just Gyms in Saffron Walden.
The biggest shake up to flat rate pensions in over a century…
Enable Independent, IFA’s of Bishop’s Stortford took interest in the new state pension, the government unveiled the biggest shake up to the flat rate pension for over a century, and will benefit couples and stay at home mums the most.
The pension which is due to be introduced in 2017 will be more than £155 per week, and will no longer being means tested. However under the new scheme an individual will build up state pension entitlements after one year of paying National Insurance contributions, however under the new system this will be increased to ten years.
Prime Minister David Cameron stated: 'A single state pension cuts out a lot of the means-testing and also will help a lot of women, a lot of low-paid people who otherwise wouldn’t get a good state pension.
'So a good idea, but it’s long-term – this is for new pensioners, I don’t want to mislead anyone.'
The age of retirement will also rise under the new plans, those teenagers today will probably have to work until the age of 70 before they can claim.
The single tier pension will benefit women the most, as they will no longer be penalised for staying at home and looking after the children, couple’s will also benefit as they will also qualify for the new payment, rather than the less generous one currently in place.
A single tier will enable people to know what they can expect from the state once they reach retirement age. Thirty-five years of NI contributions will result in a full basic state pension.
However for those people who are tied into final salary schemes, they will face higher National Insurance payments, as the right to opt out of the state pension comes to an end.
If you are nearing retirement or need to start planning towards your future, why not give your local, friendly team of Ifa’s a call we will be more than happy to help you plan for your retirement.
The pension which is due to be introduced in 2017 will be more than £155 per week, and will no longer being means tested. However under the new scheme an individual will build up state pension entitlements after one year of paying National Insurance contributions, however under the new system this will be increased to ten years.
Prime Minister David Cameron stated: 'A single state pension cuts out a lot of the means-testing and also will help a lot of women, a lot of low-paid people who otherwise wouldn’t get a good state pension.
'So a good idea, but it’s long-term – this is for new pensioners, I don’t want to mislead anyone.'
The age of retirement will also rise under the new plans, those teenagers today will probably have to work until the age of 70 before they can claim.
The single tier pension will benefit women the most, as they will no longer be penalised for staying at home and looking after the children, couple’s will also benefit as they will also qualify for the new payment, rather than the less generous one currently in place.
A single tier will enable people to know what they can expect from the state once they reach retirement age. Thirty-five years of NI contributions will result in a full basic state pension.
However for those people who are tied into final salary schemes, they will face higher National Insurance payments, as the right to opt out of the state pension comes to an end.
If you are nearing retirement or need to start planning towards your future, why not give your local, friendly team of Ifa’s a call we will be more than happy to help you plan for your retirement.
Monday, 7 January 2013
Highest number of employed since records began
In an upbeat report from the Office for National Statistics (ONS) in late December, it was stated that unemployment fell by 82,000 to 2.51 million in the period between August and October bringing the national rate down to 7.8%, a 0.2% drop from the previous quarter, which is the largest quarterly fall since 2001.
Employment also rose by 40,000 to show 29.6 million in work. This is the highest number of people in employment since records began. The private sector recorded an increase of 65,000 workers to 23.8 million. However, the public sector continued its decline, losing 24,000 workers to 5.7 million.
The minister for work and pensions, Mark Hoban, commenting on these figures was quoted as saying: “We see more people looking for work and actually finding work, so I think there’s a really strong labour market there.
“I think there’s more flexibility in the labour market, although this month we’ve seen a big increase in full-time jobs and no movement at all in the number of part-time jobs.”
On the down side total pay was only up 1.8% compared to the same period last year and therefore still below the rate of inflation. This lack of wage growth is likely to dampen consumer demand.
Meanwhile, the Office for Budget Responsibility, who are responsible for the veracity of economic forecasts on behalf of the economy, cut their forecast of the future peak of unemployment to 8.2%, which is considerably higher than the
7.8% reported by the ONS.
On behalf of the opposition, Liam Byrne, the shadow work and pensions minister stated: “Pay packets are under intense pressure as the pace of jobs growth slows down – wages are now growing at only half the rate of prices.
“Families are under real pressure right now and what today’s figures show is that the Department for Work and Pensions’ big back-to-work programmes are frankly delivering nothing.”
This is part of 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.
Employment also rose by 40,000 to show 29.6 million in work. This is the highest number of people in employment since records began. The private sector recorded an increase of 65,000 workers to 23.8 million. However, the public sector continued its decline, losing 24,000 workers to 5.7 million.
The minister for work and pensions, Mark Hoban, commenting on these figures was quoted as saying: “We see more people looking for work and actually finding work, so I think there’s a really strong labour market there.
“I think there’s more flexibility in the labour market, although this month we’ve seen a big increase in full-time jobs and no movement at all in the number of part-time jobs.”
On the down side total pay was only up 1.8% compared to the same period last year and therefore still below the rate of inflation. This lack of wage growth is likely to dampen consumer demand.
Meanwhile, the Office for Budget Responsibility, who are responsible for the veracity of economic forecasts on behalf of the economy, cut their forecast of the future peak of unemployment to 8.2%, which is considerably higher than the
7.8% reported by the ONS.
On behalf of the opposition, Liam Byrne, the shadow work and pensions minister stated: “Pay packets are under intense pressure as the pace of jobs growth slows down – wages are now growing at only half the rate of prices.
“Families are under real pressure right now and what today’s figures show is that the Department for Work and Pensions’ big back-to-work programmes are frankly delivering nothing.”
This is part of 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.
UK property records an annual increase in price
In encouraging news, UK property prices saw a 0.2% increase in November, raising the annual price increase to 1.5%, leaving the average house now costing £231,000, slightly off their recent peak value of £234,000, which was recorded in July and August.
These figures, released by the Office for National Statistics (ONS) in December, fly in the face of recent surveys from Nationwide and Halifax, who are amongst the UK’s largest lenders, who both reported slight price falls over the last year.
Not surprisingly, the ONS report also confirmed that the largest and fastest increases were recorded in London, but this did not skew the data, as if both London and the South East prices were taken out of the equation, the national price was still higher than a year ago.
Confirming these findings, the ONS said: “House prices continue to remain relatively stable across most of the UK, although prices in London are increasing and prices in Northern Ireland are falling.
“The year-on-year increase reflected growth of 1.8% in England and 2.8% in Wales, which were offset by a decline of 2.2% in Scotland and 11.7% in Northern Ireland.”
Whilst this is welcome news, especially for home-owners, the modest annual increase shown does not represent a general revival in house prices and the market remains subdued in activity.
As reported in another article here (Funding for Lending), the Government’s Funding for Lending Scheme (FLS) is starting to gain momentum and, hopefully, will start to prime the first-time buyer market, which in turn may increase market activity in the housing pipeline in the medium to long-term across the country.
These figures, released by the Office for National Statistics (ONS) in December, fly in the face of recent surveys from Nationwide and Halifax, who are amongst the UK’s largest lenders, who both reported slight price falls over the last year.
Not surprisingly, the ONS report also confirmed that the largest and fastest increases were recorded in London, but this did not skew the data, as if both London and the South East prices were taken out of the equation, the national price was still higher than a year ago.
Confirming these findings, the ONS said: “House prices continue to remain relatively stable across most of the UK, although prices in London are increasing and prices in Northern Ireland are falling.
“The year-on-year increase reflected growth of 1.8% in England and 2.8% in Wales, which were offset by a decline of 2.2% in Scotland and 11.7% in Northern Ireland.”
Whilst this is welcome news, especially for home-owners, the modest annual increase shown does not represent a general revival in house prices and the market remains subdued in activity.
As reported in another article here (Funding for Lending), the Government’s Funding for Lending Scheme (FLS) is starting to gain momentum and, hopefully, will start to prime the first-time buyer market, which in turn may increase market activity in the housing pipeline in the medium to long-term across the country.
Markets: (Data compiled by The Outsourced Marketing Department)
The political impasse was taken to the wire over the anticipated American ‘Fiscal Cliff’ with no resolution offered at the close of the markets in December.
Therefore, most global markets remained muted awaiting news from across the pond.
The Dow Jones finished the year on 13,104.14, up a marginal 0.6% on the month, and 1.2% on the year. The Nasdaq closed on 3,019.51 to record a monthly rise of 0.31% but an impressive gain of 15.9% for the year.
Here in the UK the FTSE100 ended 2012 on 5,897.8 to show a monthly gain of 0.53% and a 5.8% improvement for the year.
The wider FTSE250 closed out at 12,375.0, a 2.83% rise since November and recording a splendid 22.4% gain for the year. The junior AIM market finished the year on 707.21 improving a modest 2.91% for the month which mirrored its annual gain of 2.0%.
Elsewhere, the Eurostoxx50 closed out a turbulent 2012 at 2,635.93, a 2.36% gain for the month and a 13.7% improvement for the year. The Nikkei finished at 10,395.18, up a healthy 10.05% for the month and very respectable 22.9% for
the year.
On the currency markets, sterling finished 2012 at $1.63 against the greenback and €1.23 against the Euro to record respective annual gains of 4.4% and 3.3%.
The Euro also had an annual gain of 2.3% against the US Dollar ending the month at $1.32. The Brent Crude benchmark for oil saw the black gold finish 2012 at a symbolically symmetrical $111.11, a monthly gain of 1.46% and a modest rise of 3.4% for the year. Gold recorded yet another year of gains, this year rising by 9.4% to close out the year at $1,675.90.
This is part of 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.
Therefore, most global markets remained muted awaiting news from across the pond.
The Dow Jones finished the year on 13,104.14, up a marginal 0.6% on the month, and 1.2% on the year. The Nasdaq closed on 3,019.51 to record a monthly rise of 0.31% but an impressive gain of 15.9% for the year.
Here in the UK the FTSE100 ended 2012 on 5,897.8 to show a monthly gain of 0.53% and a 5.8% improvement for the year.
The wider FTSE250 closed out at 12,375.0, a 2.83% rise since November and recording a splendid 22.4% gain for the year. The junior AIM market finished the year on 707.21 improving a modest 2.91% for the month which mirrored its annual gain of 2.0%.
Elsewhere, the Eurostoxx50 closed out a turbulent 2012 at 2,635.93, a 2.36% gain for the month and a 13.7% improvement for the year. The Nikkei finished at 10,395.18, up a healthy 10.05% for the month and very respectable 22.9% for
the year.
On the currency markets, sterling finished 2012 at $1.63 against the greenback and €1.23 against the Euro to record respective annual gains of 4.4% and 3.3%.
The Euro also had an annual gain of 2.3% against the US Dollar ending the month at $1.32. The Brent Crude benchmark for oil saw the black gold finish 2012 at a symbolically symmetrical $111.11, a monthly gain of 1.46% and a modest rise of 3.4% for the year. Gold recorded yet another year of gains, this year rising by 9.4% to close out the year at $1,675.90.
This is part of 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.
Funding for Lending starts to work
The Funding for Lending (FLS) scheme - introduced earlier this year by the Bank of England to offer cheaper funded money amounting to approximately £60bn to banks and building societies to enable them to lend-on to individuals and smaller businesses – is showing signs of starting to work.
Although in early December they reported that only £4.4bn of funds had been drawn on by only six lenders. Whilst emphasising that they did not expect to see the full picture until into the New Year, the Bank of England stated that early signs of take-up were good. In their quarterly bulletin they said: “FLS should lead to more and cheaper credit flowing into the real economy than otherwise.
“Early signs have been encouraging: market funding costs for UK banks have fallen sharply and many loan rates have fallen.
“But given the usual lags from credit being offered to loans being made, the FLS is unlikely to materially affect lending volumes until 2013.”
One negative aspect of this initiative is that savers rates have also declined, as the banks and building societies involved are under less pressure to raise funds from the wider market place.
Being just one of many initiatives introduced to try to boost the economy; FLS joins quantitative easing as another arrow in its reflationary quiver. Here they have injected £375bn of ‘new’ money into the banking system and they have held interest rates at an historical low of 0.5% for nearly four years.
Echoing the Bank’s comments, Mike Cherry, of the Federation of Small Businesses (FSB) was quoted as saying: “The cost of borrowing is beginning to slightly fall, so there is some sign that FLS is having an impact.
“There has been an increase in the number (of loans) that have been approved straight away.”
This is part of 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.
Although in early December they reported that only £4.4bn of funds had been drawn on by only six lenders. Whilst emphasising that they did not expect to see the full picture until into the New Year, the Bank of England stated that early signs of take-up were good. In their quarterly bulletin they said: “FLS should lead to more and cheaper credit flowing into the real economy than otherwise.
“Early signs have been encouraging: market funding costs for UK banks have fallen sharply and many loan rates have fallen.
“But given the usual lags from credit being offered to loans being made, the FLS is unlikely to materially affect lending volumes until 2013.”
One negative aspect of this initiative is that savers rates have also declined, as the banks and building societies involved are under less pressure to raise funds from the wider market place.
Being just one of many initiatives introduced to try to boost the economy; FLS joins quantitative easing as another arrow in its reflationary quiver. Here they have injected £375bn of ‘new’ money into the banking system and they have held interest rates at an historical low of 0.5% for nearly four years.
Echoing the Bank’s comments, Mike Cherry, of the Federation of Small Businesses (FSB) was quoted as saying: “The cost of borrowing is beginning to slightly fall, so there is some sign that FLS is having an impact.
“There has been an increase in the number (of loans) that have been approved straight away.”
This is part of 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.
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