State pension age could rise faster than expected

Enables IFA’s in Bishops Stortford are all too aware that the state pension age has already been going up on a gradual basis from its longstanding levels and millions more working-age people may have to wait until their 70s to retire as more official reviews of the state pension age come into play.

A new consideration is underway as to whether to change the state retirement age from April 2028, the point at which it will have reached 67 for men and women, potentially affecting people under the age of about 55. John Cridland, the former director general of the CBI, was appointed to act as the independent reviewer of the pension age and will look at whether the pension age should continue to be linked to rising life expectancy.

The Office for Budget Responsibility has already forecast that on current life expectancy trajectories the state pensionable age could reach 70 by the mid-2060s, but some have warned that it could come even sooner than expected. Tom McPhail, the head of retirement policy at the financial services firm Hargreaves Lansdown, said: “We fully expect state pension ages to go up faster than currently planned, and those joining the workforce today are likely to find themselves waiting until their mid-70s to get a payout from the state system. “Whatever decisions they make, the government needs to make sure they communicate them very, very clearly so individuals can plan their retirement savings with some certainty about what they will get from the state, and when they will get it.”

If you are worrying about your pension then why not get in touch with our team at Enable, we will help you to review your current pension plan.

Source: BBC

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.
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Age limit for mortgages increases to 85 years old

Getting a mortgage when you are older can be more difficult and Enable’s IFA’s of Bishops Stortford know that traditionally banks and building societies have been reluctant to extend loans and mortgages to older borrowers. Lending to anyone over 65 has been seen as risky and unprofitable for so long that it’s meant mortgages for older borrowers have been rare. But Nationwide has recently increased its age to 85 years of age and Halifax has increased the age of their borrowing limit to 80 years of age. Which means that customers can now take out a loan and repay before their 80th birthday.

This is all part of a move by banks and building societies who have started to recognise the need for extending the age of mortgages because more people are living and working for longer. However before you begin the hunt for a mortgage in later life you should set out exactly what you need from your mortgage not least because applying for deals that meet your needs and requirements will increase your chances of getting approved.

Once you know what you want from your mortgage you then can exclude a large number of the deals as many banks place a maximum age limit on their mortgage deals and others specify an age limit by which the mortgage must be repaid.  The upper age limit for new applicants is usually set somewhere between 65 and 70.

Many lenders will limit mortgage terms to ensure the money will be repaid in full by the time the borrower reaches somewhere between 70 and 85. One other difficulty is that many mortgage lenders do not openly state a maximum age as offering you a mortgage is often dependent on your income too.

This means that while it is worth checking for a maximum age upfront, if you want to find out more about your options Enable’s’ IFAs can help talk this through, as we can look at mortgage deals from across the market place.

Your home could be at risk if you do not keep up your loan repayments

Source : The Telegraph

Issued by: Enable Independent Financial Life Planners • 
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Fed up with your bank? Then consider moving by using a switching service

Enables IFA’s in Bishop’s Stortford always like to make sure that the basics of financial management are in place, and being happy with your bank accounts is key. Interestingly more and more people are switching current accounts, a total of 309,678 people changed banks in the first three months of the year said the Current Account Switch Service

 There are 68 million active current accounts in the UK and the vast majority of customers remain loyal to their banks, but some experts have questioned the model of current accounts in the UK. If you are thinking of swapping banks there is now a switching service which means that customers can move over to a new account within seven working days and all regular incoming and outgoing payments are automatically switched over from the old account.

"There are still too few people switching," said Hannah Maundrell, from financial comparison website Money.co.uk." It is very telling that the competition watchdog has delayed its report into how to reinvigorate the industry because it suggests there is no easy solution. "The key problem with current accounts is overdraft charges, this is where people are getting significantly and consistently stung."

According to recent figures then banks Santander, the Halifax, and Nationwide Building Society have attracted the larges amount of new customers. One commentator suggested that this showed rewards for switching were more of an incentive for potential customers than the arrival of new banks on the market.

Source: Moneyco.uk

Issued by: Enable Independent Financial Life Planners • 
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Friday afternoon frauds

It is shocking to hear that people buying or selling properties have been defrauded out of huge amounts of money recently. Action Fraud said this type of fraud has been on the rise since last summer, peaking in December. Between November and January, 35 reports have been made resulting in a combined loss of £2,665,819. Buyers and sellers of properties should essentially avoid communicating with their solicitors and conveyancers by email, experts warn.

“Friday afternoon fraud” as it has been called has seen more and more criminals hack into email accounts and divert large payments that should have been for buying your home lost. The scam has been named  “Friday afternoon fraud” because criminals typically target transactions being processed ahead of the weekend or bank holidays. This limits the chance of detection.

The fraudsters typically gain access to the email accounts of either the victim or their solicitor. When legitimate emails are sent between these parties giving details of bank accounts into which money should be transferred, the fraudsters alter the details so the money is sent to their own accounts. Leading experts in the fields of cyber-security now suggest the public should avoid email when giving or receiving payment instructions to solicitors.

Tony Neate, chief executive of Government-backed anti-fraud agency Get Safe Online, said: “You don’t hear of fraud occurring because someone has overheard a phone conversation.”

Action Fraud, which works alongside the fraud squad, has also said people seeking to move large sums should check bank details by phone. “Preferably talk to the solicitor whose voice you recognise.”

Mr Neate also suggests whenever you need to make a large transaction, transfer a small amount first - “Send an initial payment of £1 to make sure the bank account is legitimate.” "Once you have checked the other party has received the transaction, you can transfer the rest of the balance,” he said.

Source: The Telegraph

Issued by: Enable Independent Financial Life Planners • 
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Reverse pension freedoms to protect young people

There has been much made of the recent pension freedoms and Enables IFA’s in Bishops Stortford are interested to see that some experts argue that pension freedom should maybe be partly reversed, to force retirees to annuitise part of their savings. This they say would help protect younger taxpayers from supporting those who run out of money in old age.

Following the introduction of pension freedom annuity sales have fallen as savers look to access their money through other kinds of drawdown products. Some like David Blake of the Pensions Institute have raised questions as to why a pensions revolution, was ever needed, ‘Pensions have to provide an income for life no matter how long [a person] lives and that has not changed,’ he said.
‘You haven’t only got your pension wealth [to consider] but your health, your family’s health and inheritance, “he said.

In order to help people stretch their savings across retirement, Blake thinks part-annuitisation should be compulsory, stating ‘voluntary insurance will not work’.  ‘I think people have to be persuaded that the sensible thing to do is buy longevity insurance at least with part of their pension pot so they do not run out of money,’ he said.

Andy Manson, an adviser at KPMG, questioned whether retirees understood the responsibility they were taking on in managing their own pension pots. ‘They have high expectations that will not be filled,’ he said, and the next generation might be called on to bail out retirees who blow all their savings. If you are concerned about your savings Enable’s IFAs can help you with financial planning.

Source: New Model Advisor City Wire

Issued by: Enable Independent Financial Life Planners • 
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The Bank of Mum and Dad

Enable’s IFA’s in Bishops Stortford regularly find themselves helping Mum and Dad find a way of financially supporting their young people to be able to buy their own home. If you’re a parent of children in their 20’s and 30’s then the current housing pressures will come as little surprise. The current situation has gone so far that recently according to research by Legal & General and the Centre for Economics and Business Research the ‘bank of mum and dad’ is now the equivalent of a one of the top ten mortgage lenders in the UK.

Parents helping their children to get on to the property ladder has reportedly become such a crucial part of the housing market that they will be involved in a quarter of all property transactions this year. With constantly rising house prices despite years and years without any real wage rises, a shortage of supply and tougher more heavily monitored mortgage regulations since the financial crisis have made it more and more difficult for first-time buyers to get on the ladder. Parents on average give their children around £17,500 to help them get a foot on the property ladder which when all added together adds up to a staggering £5 billion per year.

Louisa Fletcher, a property expert, told the BBC: ‘We’re looking at house prices in many areas back to post-crisis highs, and realistically I think that’s only going to continue, so I can only see the bank of mum and dad probably growing in stature as one of the biggest lenders.’

If you would like to find out the best way to help your children get onto the housing ladder then why not give our team of IFA’s a call today, as we are independent we can give you the best deals from across the market place.

Source: The Spectator

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Retail sales - particularly online, continue to rise...

UK retail sales in March continued to show year-on-year growth with the volume of sales estimated to have increased by 2.7% compared with March 2015, the 35th consecutive month of annual growth.

Figures for online sales underline the continuing changes in British shopping trends, with consumers turning away from purchasing on the high street in favour of more online shopping. The value of online sales was 8.9% higher than a year ago.

Clothing and footwear sales declined, however big ticket items continued to perform well with furniture being the main contributor to total sales growth. Average store prices, including petrol stations, were 3% lower in March compared with a year earlier, an indication that inflation will continue to remain low.

Sales over the Easter weekend were disappointing, due in part to the poor weather that deterred shoppers from buying summer clothes or spending money in garden centres. However, commentators believe that these purchases are simply deferred and expect to see figures bounce back when the weather improves.

The composition of the high street looks set for further change as two well-known high street names called in the administrators in April. BHS employs 11,000 and has 164 stores in the UK, Austin Reed employs 1,200 people and has 100 standalone stores and is represented in a further 50 locations. Commentators expressed the view that these brands had failed to keep pace with their competitors and the changing habits of UK shoppers.

Issued by: Enable Independent Financial Life Planners • 
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UK borrowing overshoots target

The Chancellor’s deficit reduction policy has again come under pressure with news that the budget deficit for the financial year to March stood at £74bn, £17.7bn less than the previous year, but £1.8bn more than the Office for Budget Responsibility’s (OBR) forecast of £72.2bn for 2015- 16. However, commentators believe that in macro-economic terms this is a fairly modest overshoot and means that the OBR forecast could yet be vindicated.

George Osborne had pledged to return the UK economy to surplus by 2020, with the OBR forecast stating that the UK could be running a budget surplus of £10.4bn in 2019-20 and £11bn the following year. However, the Chancellor has since revised down his forecasts in a move designed to shrink the deficit more slowly, and reduce the need to introduce yet more austerity measures. In the most recent forecast, the OBR expects the deficit to be £55.5bn in 2016-17, £38.8bn in 2017-18, falling to £21.4bn in 2018-19.

Reporting on income and expenditure, the ONS said that the government received £636.2bn in income for the financial year to March, an increase of 4% on 2015. Over the same period the government spent £696.2bn, roughly in line with the previous year. Two thirds of this figure goes to central government departments, the remaining third is accounted for by expenditure on social benefits including pensions, unemployment benefit, child benefit and maternity pay, together with capital investment and the interest payments due on the government’s outstanding debt.

With weaker than expected growth from tax receipts contributing to the borrowing target overshoot, HMRC has announced that it has plans to pursue tax avoiders more assiduously in the coming year. It remains to be seen if these measures, together with the planned savings to the welfare budget, will enable the Chancellor to meet this year’s target.

Issued by: Enable Independent Financial Life Planners • 
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MARKETS: (DATA COMPILED BY THE OUTSOURCED MARKETING DEPARTMENT)

Following the IMF downgrade for global growth, equity markets were relatively unmoved as growth expectations had already been marked down. Most economists had previously downgraded their forecasts in response to weaker growth in both the US and Japan, combined with ongoing concerns over the emerging markets, uncertainty over the EU Referendum and commodity prices. As commodity prices firmed up and business surveys picked up, the outlook brightened somewhat. With growth and inflation continuing to disappoint, central banks are under increasing pressure to add further stimulus.

 In the UK, the FTSE100 gained 235.4 points or 3.8% to the month’s high of 6410.30 (20 April), losing ground in the latter days of the month to finish April at 6241.90, a modest month-on-month rise of 1.1%. The wider FTSE250 lost 0.7% over April, to close the month at 16,801.60. The junior AIM gained 2.4% over the month to close on 727.70.

Across the pond, the Dow Jones index gained a mediocre 0.5% during April to close the month on 17,773.64. The NASDAQ, heavily influenced by technology stocks, fared worse losing 94.49 points to 4775.36 a fall of 1.9%. On 28 April, Fed officials voted to leave monetary policy on hold, opting not to guide towards an imminent hike in interest rates. Their statement reflected a slight improvement in the economic outlook as they removed the reference to global developments continuing to pose risks.

On the continent, the Eurostoxx50 experienced a three month high of 3151.69 (21 April), however ended the month gaining just 23.28 points to 3028.21, an advance of 0.8%. In Japan, where government debt continues to rise and the budget deficit remains high, the Nikkei225 index lost 0.6% to 16,666.05. In a surprise move, on 27 April the Bank of Japan chose not to increase stimulus efforts against market expectations.

In currency markets, the US dollar finished the month at $1.45 against sterling and the euro closed at €1.27 versus sterling. Oil had a good month, Brent crude ended April up 17.5% to $47.39 a barrel. Gold also experienced positivity with the metal rising +4.9%, to close at $1,292.87 a troy ounce.

Issued by: Enable Independent Financial Life Planners • 
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IMF cuts UK annual growth forecast

The International Monetary Fund (IMF) has cut its forecast for UK annual growth from 2.2% to 1.9%, citing the ‘uncertainty’ posed by the EU Referendum. In 2015, Britain’s economy expanded by 2.3%, with economists expecting that growth would slow this year and
in subsequent years, a view shared by the IMF who have kept their forecast of 2.2% growth in 2017 unchanged.

 The IMF believes that ‘A British exit from the European Union could pose major challenges for both the UK and the rest of Europe. Negotiations on post-exit arrangements would likely be protracted, resulting in an extended period of heightened uncertainty that could weigh heavily on confidence and investment, all the while increasing financial market volatility’.

The Prime Minister, not surprisingly, supports this view commenting, “The IMF is right – leaving the EU would pose major risks for the UK economy. We are stronger, safer and better off in the European Union.” However, those campaigning for Britain to leave the EU have rejected the views held by the IMF and have accused it of downgrading the UK’s forecast at the request of the Chancellor, George Osborne. They also point out that IMF forecasts for the UK have often proved wrong in the past.

Those advocating the UK’s exit from the EU believe that remaining in an unreformed EU poses even bigger risks. They argue that fundamental problems with the European banking system and the euro remain unsolved, as does the current migration crisis.

The UK isn’t the only economy to see its forecasts cut by the IMF. The US forecast has been reduced from 2.6% to 2.4%, with the global growth figure scaled back from 3.4 % to 3.2%.

Issued by: Enable Independent Financial Life Planners • 
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Q1 2016 - UK economic growth slows...

The Office for National Statistics (ONS) reported that between January and March 2016 Gross Domestic Product (GDP) grew by 0.4% in-line with economists’ expectations, down from 0.6% in Q4 2015. This marks the 13th consecutive quarter of positive growth for the UK.

The ONS report that this slowing of economic growth in Q1, was partly due to a sharp fall in construction output, falling 0.9% during the first three months of 2016. Industrial output also dragged, falling 0.4% during the period, as did agriculture by 0.1%. The ONS said there was no evidence to substantiate a ‘Brexit effect ‘on GDP. The government’s decision to hold the EU referendum was not taken until late February. Business groups cite the impact of weaker global trade and New Year financial market turbulence as more likely explanations for the tail off in growth.

The service sector, the largest part of the economy which accounts for more than three quarters of GDP, continues to perform well, growing 0.6% in Q1, compensating for falls in output in the other three parts of the economy. Joe Grice, Chief Economist at the ONS, commented, “Today’s figures suggest growth has slowed as compared with the pace up to the middle of last year. Services continue to underpin the economy but other sectors have shown falling output this quarter.”
Ruth Miller, economist at Capital Economics, said of the slowdown in growth, “Many of the factors likely to blame for the first quarter’s weakness should prove short-lived. We would not be surprised if growth were to subsequently accelerate in the second half of the year, putting the economy back on track.”

The IMF recently downgraded its global growth forecast and unlike the ONS, refer to Brexit ambiguity as a contributing factor.

Issued by: Enable Independent Financial Life Planners • 
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Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
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Making a Will

Enable’s IFAs in Bishop’s Stortford know how much time some put into making sure their loved ones will be financially provided for should anything happen to them.  If you really want to be sure your wishes will be met after you die it is vitally important that you make a will.

A will is the only way to make sure your savings and possessions go to the people and causes that you care about. It is also the best way of avoiding disputes between relatives some disputes over wills can cause arguments among family members and may even need a solicitor to resolve them. Leaving a will should remove any doubt about who you want to leave your estate to.

It can be very hard to talk to your loved ones about death yet many of us want to make sure our families will be provided for. Making a will and talking about it can save everyone a lot of worry. Deciding who you want to leave your possessions to (your beneficiaries) can help you make sure they go to the people you intended. It can also ensure that assets are kept within the family and are passed on down the generations. Many people are concerned that new spouses or second families will inherit their assets in the future, and a well-structured will can help to prevent this. Making sure you have planned for Inheritance Tax can also be thought through.

Your will can also be the best way to let people know what you want for your funeral, whether you would prefer to be buried or cremated, taking some of the stress away from the family at such times.

Source : Age UK

Issued by: Enable Independent Financial Life Planners • 
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Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
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Building long term wealth

Enable’s experienced IFA’s in Bishops Stortford know that owning a property especially one that is your home has been one of the sure-fire ways to build long-term wealth in recent years. Recent date from website Zoopla indicate that there are currently more than 600,000 property millionaires in Britain. “A price tag that was once the exclusive preserve of stately homes or mansions is now an increasingly common label for modest houses.’ Says Lawrence Hall, of Zoopla.

So how do you make sure passing on your property is tax efficient? Capital gains tax is not an issue for owners of properties they live in.  But it is inheritance tax levied at 40 per cent that can take the edge off property wealth for the next generation. Recent figures from the Office for National Statistics indicate that inheritance tax charged in the last tax year totalled £4.6 billion. Inheritance tax is currently charged at 40 per cent on the values of estates above £325,000, although for married couples and civil partners, they effectively have an allowance of £650,000 because they can pass on their assets and possessions to each other tax-free.

From next year however a ‘transferable main residence’ inheritance tax allowance will be introduced. It is being phased in gradually; starting at £100,000 from April 2017, rising by £25,000 each year till it reaches £175,000 in 2020. By 2020, this will effectively raise the inheritance tax threshold to £1million for married couples who leave their home to children or grandchildren. To make sure your wealth is not eroded by inheritance tax some astute financial planning can help Enable’s IFAs are here to help.

Source: Tax Efficient Review


Issued by: Enable Independent Financial Life Planners • 
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Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
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Redefining retirement

If you are part of the younger generations the idea that retirement starts at 65, and will be a time of financial security and adventure might need reviewing. If you’re not retiring in the next decade your old age might look decidedly different says Alistair McQueen, retirement expert at insurer Aviva. He says younger generations need to take heed of the Turner Report, which suggests they will have to save more, work longer and retire with less money.  

He also said that retirement has changed dramatically since the days before the state pension, and even since the state pension was introduced. ‘Before the 1900s, retirement used to be a time of poverty.’ ‘Then when the welfare state was introduced in the 1940s, you had five years or so in retirement, and it came to be seen as a rest period. ‘Then people began to live longer and retirement was seen as a reward now, since retirement has lasted 10 or 15 years it has become a right that people get to enjoy a great time of adventure, freedom and leisure.’ McQueen thinks the current retirees are an ‘abnormality’.

The main difference between current retirees and future retirees is the demise of defined benefit (DB) pensions, also known as final salary pensions. DB pensions are workplace pensions that pay out a percentage of final salary multiplied by the number of years worked. These pensions have been replaced by defined contribution (DC) pensions which are far less generous.  On the whole, those saving into a DC pension would have to save far more than those saving into DB pensions in order to get the same income in retirement. If you are looking to put aside more for longer, Enable’s IFAs can try and help you make the right choices for your own personal situation.

Source: New Model Advisor   

Issued by: Enable Independent Financial Life Planners • 
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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