What should you keep in cash savings?

At the height of the banking crisis Enable’s IFAs know that many savers were reassured  by the knowledge that £85,000 of cash was protected by the FSCS to customers of banks, building societies and credit unions should they collapse. It was the near collapse of Norther Rock in 2007 that saw policymakers take action on deposit protection. At the time, it was the Labour government that moved to guarantee 100 % of £35000 of saving replacing a previously tiered system. It was increased to £50,000 during the 2008 banking crisis and £85,000 at the end of 2010.

But the Bank of England has recently been forced cut by £10,000 that amount, because of the slump in the euro over the past five years. The guarantee will soon cover just £75,000 per account rather than £85,000. The Bank has to reduce the cover to bring the UK into line with the rest of the EU, which has set a threshold of saver protection at €100,000. Changes in the value of the euro since then mean the Bank has to alter the conversion rate used to translate euros into pounds at the Financial Services Compensation Scheme (FSCS).

Danny Cox, chartered financial planner at Hargreaves Lansdown, said: “This is absolutely bonkers. Savers are already suffering rock bottom interest rates, and now to add insult to injury the safety of that cash is being undermined”.  If you have worries about where you are holding your cash Enable’s IFA’s in Bishop's Stortford can talk you through your options.

Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

What will future pensions bring?

It would be hard to have missed that in April, there was a major overhaul of pensions, allowing people to take out some of their pension in cash. At Enable we did not see many people taking advantage of the new regulations. But if you took money out of your pension using the new "flexible access" provisions, your annual allowance will have been reduced to £10,000 not the £40,000 annual allowance you had before.

The current pension regime still gives tax relief when you put money into a pension and this pot grows largely tax-free.  You are only taxed when you take money out, apart from a 25% tax free lump sum. If your employer pays into the scheme, or funds a final salary pension, there is no employee or employer National Insurance Contributions (NICs) on the value of these payments or benefits. But among the Budget papers was s a consultation document which suggested further possible change that could mean replacing this long-standing system.


So instead of tax and NICs relief on contributions, pension saving would be made out of after-tax income, as with the Individual Savings Account (ISA) system. Then when the money was finally taken out, it would be tax-free. The Budget also announced the abolition of "pension input periods". It is really important to get your timings right to make the most of your pension. Enables IFAs in Bishop's Stortford can help you think through your options so that you can make the most of your pension savings in the future.



Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
 NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

Women and pensions - all you need to know..

When it comes to retirement savings habits among men and women can differ greatly. Enable’s IFAs in Bishop’s Stortford work hard to make sure the message that saving is crucial for a secure financial future is clear, a recent Scottish Widows report revealed that women save 38% less than men – a gap that has actually go wider in recent years.

Some 21% of women have no pension savings, compared with just 9% of men who are relying solely on state provision, according to another study by Prudential. Yet with life expectancy for women still longer than men, there is a real need for women to save more, and to make plans and provisions for their futures.

The average amount saved by women per month for retirement is just £100, according to Scottish Widows. Hannah Edwards at BRI Wealth Management says: “As women have a longer life expectancy than men, a woman does logically need a larger pension pot in capital terms.
“The new pension freedom rules – which allow access to pension savings for the over 55s – have been immensely well received by investors and planners, but you do need to be mindful that the capital does not run out. In Australia, where people who have enjoyed pension freedoms for a few years longer than ourselves, the average woman runs out of capital at just 86, for example.”

To retire on an income of £25,000 a year you will need to have saved a pot of £298,500 to top up your state pension, according to calculations by Hargreaves Lansdown. Enable’s IFA’s can help men and women find a way to start saving as soon as possible.

Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

Budget pension change to plan for

Enable’s experienced IFA’s in Bishop Stortford have been helping many mange the pension aspect of their financial planning recently. Pensions have become increasingly difficult to understand, especially for those in final salary schemes and higher earners and more twists and turns to make sense of are on their way.

As expected by many, the amount that can be saved in a pension free of tax over the course of a lifetime is to be reduced from £1.25m to £1m from April 2016. If your pension savings are more than £1m by that date, or you think that what you have already saved will have grown to more than £1.25m by the time you take your pension, it is likely that you will be able to protect the funds you already have, as long as you do not put any more into the pension. This is known as "fixed protection".

Currently you can contribute up to £40,000 a year into a personal pension scheme. If you have a "defined contribution" employer scheme, the total of employer and employee contributions must not exceed £40,000. Under the new rules announced in the Budget, this £40,000 allowance will be reduced for those whose total income is above £150,000.  In working out whether your income is above £150,000, you need to include the value of any pension contributions you make, any pension contributions made by your employer, and the increase in value of any final salary scheme over the tax year, "adjusted income". For every £2 of adjusted income you have over £150,000, your annual allowance will be reduced by £1. The maximum reduction is £30,000, leaving an annual allowance of £10,000. So once your income is over £210,000, there is no further reduction. 

Some of the changes are highly technical so before you make a contribution to your pension, you should find out whether they make a difference to your position.

Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

Budget boost for first-time buyers

Many financial experts including Enable’s IFAs in Bishop’s Stortford have been saying that the 45 per cent tax relief on interest payments has been putting landlords at an advantage in the property market against first-time buyers.

In George Osbourne’s Summer budget document, it says: 'The current tax system supports landlords over and above ordinary homeowners. Landlords can deduct costs they incur when calculating the tax they pay on their rental income. A large portion of those costs are interest payments on the mortgage. 'Mortgage Interest Relief was withdrawn from homeowners 15 years ago. However, landlords still receive the relief. 'The ability to deduct these costs puts investing in a rental property at an advantage.'

George Osborne has said he wants to support home ownership but 'act in a proportionate and gradual way. ''It is only fair that there is a more level playing field between first-time buyers and landlords.” This change will be phased in over a four-year period from April 2017. Currently, landlords can claim tax relief on monthly interest repayments - at the top level of tax they pay of 45 per cent. Mortgage interest relief is estimated to cost £6.3billion a year, a Freedom for Information request revealed recently.

Some experts worry that the move could also force landlords to raise rents to compensate for the change, which would be bad news for tenants. But it could be good news for first-time buyers who are competing with landlords on the property market where demand continues to outstrip supply.

Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Budget Inheritance tax changes

Enable’s IFA’s in Bishop’s Stortford take great care to help people plan the management of their financial estate well, part of this includes planning for any legacy. In the latest budget the Chancellor has decide that from 2017 the inheritance tax threshold will be phased into increase to £1million underpinned by a new £325,000 family home allowance.

Essentially inheritance tax is to be scrapped on homes worth up to £1m the inheritance tax policy will be funded by limiting the amount of tax relief on pension contributions given to those earning more than £150,000 a year. In a joint article, Mr Cameron and Mr Osborne write: "As we promised in our manifesto, we'll take the family home out of inheritance tax for all but the richest."
They add: "It can only be right that when you've worked hard to own your own home, it will go to your family and not the taxman." Andy Silvester, campaigns director at the Tax Payer Alliance (TPA) said: "Inheritance tax is one of those things, that even for people who frankly would not be hit by it at the moment, is a really unpopular tax. "People find it fundamentally unfair that income you've already been taxed on in order to buy your house is taxed on when you die.

From April 2017 parents will each be offered a further £175,000 "family home allowance" to enable them to pass property on to children tax-free after their death.  This will be added to the existing £325,000 inheritance tax threshold, bringing the total transferable tax-free allowance from both parents in a married couple or civil partnership to £1m.

Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Saving up for a new car?

Many of Enable's clients talk to our independent financial Advisors in Bishop’s Stortford about the best way to save for a new car. It might not be everyone’s think but since the demise of Top Gear a few more folk might be thinking about the pros and cons of the electric car.

The recent government giveaway of £5,000-a-car has sent sales of electric vehicles in Britain soaring to record levels – but buyers may now have only a few months left before the grant money runs out.
Back in early 2011 the £5000 grant was launched and the government promised that the scheme would continue until 50,000 had been awarded. There was slow early take-up was slow, and two years in just 3,200 grants had been made but since the launch of the Nissan Leaf, the remarkable success of the Mitsubishi Outlander plug-in, and the fact that there are now a further 35 models to choose from, has ignited the market.

The first five months of 2015, has seen the number of electric cars sold in the UK and those eligible for the £5,000-a-car grant jump to 11,842 four times the numbers sold over the same period last year.  So far, the government has awarded around 36,000 grants but with the 50,000 award limit in sight if you have any interest in taking them up on the grant its time to act. If sales continue to grow the grant money will almost certainly run out before the end of the year, possibly sooner.


 Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

How to leave your pension to someone else

Enable’s IFAs in Bishops Stortford have had lots of conversations with people about their pensions since all the changes this April. One thing many people don’t realise is that it has become easier to safeguard your pension for your heirs and you can now nominate anyone to inherit your remaining pension fund as a drawdown account with the right pension.

If you feel you have worked hard and saved all through your life so as to have a pension to provide enough to live on in retirement you will be delighted to realise that more of that fund can survive your death, providing an income or nest egg for your loved ones.  Even though pensions haven’t counted as part of an estate for inheritance tax purposes, until recently there has been a hefty 55% pensions death tax. Since this was thrown out earlier this year as part of the government’s “pensions revolution”, it has provided an enormous opportunity to leave some, or all, of your pension pot in a tax-efficient way.

Broadly speaking, if you die before the age of 75 your beneficiaries will pay no tax on any pension savings left to them. So the wealth you built up in a pension can be passed on as inheritance without losing the tax shelter or any tax charge. Only on your 75th birthday do your pension assets become taxable, but only at the marginal rate of income tax. You can nominate anyone to inherit your remaining pension fund as a drawdown account. This means beneficiaries can dip into the pension pot they inherit as and when they want. If you want to find out more about this Enable’s IFAs are happy to talk you though your pension options.

Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

What’s happening to the markets after the Greeks voted no?

With the Greek crisis coming to a head Enable’s IFAs in Bishop’s Stortford have been looking out to see what stock markets across Europe are up to? Many have fallen, but they are not plummeting. France’s CAC 40 is down 1.5%, the German DAX 1.4%, while Italy’s FTMIB has lost 2.65%.

Outside the Eurozone, the FTSE 100 is down by 0.5%., over in Asia where investors are also nervous about a slowdown in the Chinese economy, it’ a similar story. “The Greece no vote is a surprise,” said Shoji Hirakawa at Okasan Securities in Tokyo. “But the key is that the direction is going toward more talks after this.”

It would seem that a bit of a muted reaction from the markets may be an indicator that investors’ perception that a Grexit is more and more likely, it seems many think it might b eunlikely to have disastrous consequences for the Eurozone.

In the UK, George Osborne has been holding crisis meetings with the prime minister, and the Bank of England governor, Mark Carney. The governor has already been attending meetings of Cobra as the Greece crisis deepened last week he has said that contingency plans for a potential Grexit have been talked about being put in place.

The situation could put more pressure on the government to speed up the UK’s timetable to renegotiate membership of the EU, John Longworth, director general of the British Chambers of Commerce said “The prime minister may get an early, and important, opportunity to put the case for fundamental reform of the UK’s relationship with the EU,” “Businesses will want him to seize this opening.”


Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

State pension pay-outs to consider

Enable’s IFAs in Bishops Stortford always take note of the state pension as part of a retirement or pension plan and since the new state pension has been revised it too is aimed at simplifying the system. From April 2016 those of pensionable age will see a single payment of about £150 made to new pensioners a nod to a fairer system.  But concerns voice earlier this year suggest that maybe on 45% of new pensioners, some two million, will be entitled to the full, flat-rate state pension in the first five years of the system.

A freedom of information request submitted by Hargreaves Lansdown revealed these figures showing how some private or workplace pension provision are contracted out of some of the state second pension, which is being integrated into the new flat-rate state pension. This could mean that they will receive a lower amount and others have gaps in their National Insurance contributions. 

On top of this from April 2017, people will also have to work longer, making 35 years' worth of National Insurance (NI) contributions, rather than the current 30, to qualify for the full pension. If you have only paid NI for just a few years you will not qualify for the new state pension at all.

"The new state pension will ultimately be a simpler and fairer system. However, in the short term it will be complicated and many people are likely to get less than they may expect," said Tom McPhail, of Hargreaves Lansdown. If you want to have a review of your pension forecast and include your state pension in that Enable’s IFAs can help make sure you are not in line for any nasty shocks.

Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

More pension changes?

Enable’s IFAs of Bishop’s Stortford note that the government wants to extend the pension overhaul to allow pensioners to sell back annuities to providers. Under the new rules, which took effect in April this year, people aged 55 and over are able to cash in their pension savings rather than buying an annuity. This latest proposals would allow five million pensioners who have already bought an annuity with their pension pot to sell it back for cash. But many are warning that this further change should not be rushed through.

One trade body has said that the proposed start date of April 2016 could put pensioners and their families at risk. The Association of British Insurers (ABI), which represents insurers who manage pension money, said that the rights of pensioners' dependents also needed to be protected. Many think it makes sense to look at lessons learned from recent pension changes before there are more.

The ABI also argues that the scope of the proposals needs to be more clearly defined "Naturally there are considerable challenges in establishing a functioning market, and many unresolved complex legal, regulatory and prudential questions," said Yvonne Braun, "We want to work with government to help resolve these issues, but given the lessons learned from the [recent] reforms and the need for clarity in many areas, we urge the government not to rush these proposals through for 2016. "Allowing more time will ensure an appropriate regulatory regime can be developed to give this new market a chance to succeed."

If you need help deciding what to make of the new pension regulations the independent financial advisors or Enable in Bishop’s Stortford can help you look at all your options.

Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD • 
Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

How to pass cash on to the kids?

As part of a well-managed financial plan many want to make sure they have organised their monies as efficiently as they can for passing on some of their wealth to the family. Enable’s IFAs in Bishop’s Stortford know that the most straightforward way to hand down money is through a cash gift. If you are a parent, a grand parent you can give any size of lump sum as a cash gift to your child free of inheritance tax, provided you live for seven years after making the gift.

If you are in a couple, you can give away £6,000 each year exempt from inheritance tax (£3,000 each). If you haven't made any gifts in the year before, you can still use that year's allowance effectively doubling the amount gifted to £12,000. It is good to remember that you can’t combine this with the £250 annual limit on small gifts for the same person.

If you are wanting to save up to help a child aged under 18 a Junior ISAs will reduce the capital and income tax liability for your child. In the 2015-16 tax year, the savings limit for Junior ISAs per child is £4,080 but at reaching 18 your child can access the money to spend as they wish so they need to be able to use the monies wisely. If your child is older and you are sure they will use the money wisely you could open an adult Isa in your child's name.  That way you could pay in each year up to the annual limit of £15,240 for the 2015-16 tax year. Remember a child of 16 can have a cash ISA but they can't have a stocks-and-shares ISA till after their 18the birthday.


Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE