Improvement in household spending power

The latest figures released from the Office for National Statistics (ONS) reveal that the typical level of spending power, or disposable income, for the average UK household in 2014-15 was £25,700. This figure is £1,500 higher than the low point seen in 2012-13. This marks a milestone from the hit taken by disposable income levels seen during the financial crisis.

This good news was compounded for pensioners who have been in receipt of the state pension, as the triple lock promise from the Government, whereby the state pension is guaranteed to rise each April by the highest of inflation, average earnings, or 2.5%, has seen the average pensioners household income rise by 7.7% or £1,500 between 2007-8 (the start of the financial crisis) and 2014-15.

However, by comparison, those people in employment have not been quite as lucky as they have seen their household disposable income rise by only 3.1%, or £900, over the same period.

Commenting on these statistics, the Chief Economist of the think tank, Resolution Foundation, was reported to have said: “Strong jobs growth and ultra-low inflation have finally pushed living standards back above where they were before the financial crisis. But the downturn has been felt very differently between generations, and across the UK.

“This generational divide opened up well before the financial crisis landed. As a result, typical working age families are no better off today than they were a decade ago, while typical pensioner incomes are 15% higher.

“This divide is unlikely to widen in the coming years, but nor do we see any sign of narrowing. By 2020, pensioner incomes are set to be over a third higher than they were at the turn of the century – more than double the increase experienced by working-age households.”

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

Can expats take money from their UK home?

Enable’s IFAs in Bishops Stortford can see that at this time of year spending time in the sun can seem really appealing. If your dream is to live more abroad for the Winters it can sometimes be hard to work out your finances. But there are more and more ways of being able to release money from a UK home using equity release.

Equity release is a form or borrowing for those over 55 who want to get money out of their UK properties without selling. There are two types of equity release in the UK lifetime mortgages and home reversion plans. The lifetime mortgage is not like a traditional mortgage because the homeowners do not make any repayments on the sum they borrow. Instead, the interest due is rolled up and the loan and interest is paid back when the property is sold after their death. Home reversion plans enable you to sell a proportion of the property in return for the cash, and when you have died and the property is sold, that money is repaid from your estate. You retain the right to live in the property rent-free for life, and there is no impact on the way you use your home as a private residence.

The average UK pensioner is using equity release is getting nearly £75,000 from their property according to data from the Key Retirement and as property prices are still going up it only increases  the amount available. If you have a property in the UK that is still your main residence  meaning you to spend more time here than abroad you should be able to get an equity release loan on that property, according to Dean Mirfin of Key Retirement. Enable’s IFAs can help you think 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 

Succesful Investing...

Enable’s IFA’s in Bishop’s Stortford have helped numerous investors over the years but when it comes to financial markets the only thing you know for certain is that no one really knows where they are heading. This does not mean you should not use them to build your wealth but no one can tell you exactly what to do for sure. But there are some steps that seem to contribute greatly to successful investing.

Over the years and even in difficult times you need to have quite a good reason not to use a tracker fund. If there really was a way to guarantee an extra 1pc return every single year, investors would go all out to find it but many ordinary investors ignore the chance to get exactly that because they overpay for investments they could get elsewhere for less. One of the cheapest ways for investors to access a market is through a “tracker” that buys all the stocks in an index according to their size.
And there’s plenty of evidence to suggest doing this gets you a better total return in the long run.
This approach suits those who are happy to make their investment and forget about it. It will rise and fall with the market, of course, but there’s no chance they’ll languish in a badly underperforming fund.

But then there are more active managers that can boast a history of beating their market of course these bets won’t come good all the time but sometimes they can get lucky in solid companies form areas they know well and avoid overpriced, bad ones that trackers will blindly buy. It is impossible to know exactly what to do but Enable’s IFA’s in Bishop’s Stortford can help work with your attitude to risk.

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 

Source - The Telegraph

What age should you plan to retire?

Enable’s IFA’s in Bishops Stortford often find themselves discussing when people would like to plan to retire. In recent years the government has steadily increased the state pension age to 68 and it could go higher. Pensions minister Steve Webb said “working past 65 will benefit individuals and the state, on the one hand giving people more time to build up sufficient pension funds, while keeping a lid on the bill for the state pension, which is expected to quadruple by the mid-2060s to £420 billion from £98 billion this year.”

Pensions expert Ros Altmann however suggests that working late into life even to 80 is unfeasible but that individuals should no longer expect to retire at 55 which is currently the earliest age at which pension funds can be accessed. On average people are actually retiring earlier than they did in the 1950’s. ‘In the 1950s, the average age of retirement for men was 67,’ says Altman. ‘At that time life expectancy was much lower than it is today, yet people are retiring earlier. This means that lifetime income is lower, especially as they often start work much later too, and they have less chance to save for a good later life income. ’It is only since the 1980s that ‘an expectation had developed that people should aspire to retire in their 50s’. ‘This is simply not sensible or sustainable, especially as life expectancy has risen significantly, general health has improved and the physical demands of most types of work have eased.’

Perhaps for younger generations the idea of a ‘retirement age’ will be an outdated concept with individual choice, and importantly economic means, determining when a person stops working. If you need help planning your pension Enables IFA’s in Bishop’s Stortford can help you look at the 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

Are you part of the lost generation of savers?

Recently Enable’s IFA’s in Bishops Stortford noticed articles drawing attention to “A lost generation of savers aged 35-to-45” - some believe that are going to be the worst prepared for retirement.  This is the swathe of people stuck between “millennials” and “babyboomers.” Babyboomers have retirement sorted out owing to historically more generous workplace pensions and defined benefit (DB) schemes that pay out a multiple of years worked and a percentage of final salary as income for the rest of an employees’ life. And the younger generation of millennials are saving early thanks to auto-enrolment, so they should be in a strong financial position when they reach retirement with decades of savings behind them.

But Holly Mackay of Boring Money, has warned that those aged 35-to-45 are not saving enough considering the reduced amount of time they have until retirement. Her survey found that of the 35-to-45 age group, just 22% were saving into a private pension. ‘There is a lost generation of 35-to-45 year olds who are rubbish with money,’ she said. ‘You have the swotty millennials who are saving money and planning, and the babyboomers, [but those in the middle] assume that the job is done because they are making workplace contributions but the contribution rates are too low.’

Jamie Jenkins, pension expert at Standard Life, agreed that there is an emerging ‘lost generation’’ he also said, “that prior to auto-enrolment, the Department for Work and Pensions estimated 10 million were not saving for retirement and now, despite more people saving, there are between 10 million and 13 million people who are not saving enough even with auto-enrolment.”  Enables IFA’s in Bishops Stortford know that the only solution for those who fall into this gap between the two generations is to save more into workplace pensions now, top up later, or work longer, we can help you talk through saving more.


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

Where could the next cuts fall?

With the general election so close now Enables IFA’s in Bishop’s Stortford have been reflecting on what kinds of policies the Treasury might put into play for savers. Both major parties appear to be seeing pension pots as a legitimate target for revenue-raising.

 What if the recent pensions lifetime allowance changes were also made to apply to ISAs. It's something that has been talked about in government circles for several years as the number of investors with assets in their IASs of £1m or more has grown. The Government could argue, as it has with pensions, that an increase in the annual ISA allowance which currently stands as £15,240 could be justifiably countered by the introduction of a lifetime limit, making the ISA savings strand less attractive. A slightly more tricky area but one in keeping with some of the current proposed changes for pensions could be the introduction of a reduced annual ISA allowance for investors on higher incomes.

In additions both the major parties appear to be heading towards being inclined to claw back allowances from higher earners, as happens with child benefit, maybe this could be extended. The personal allowance, for example, which currently begins to fall away when a person's earnings reach £100,000, could be withdrawn at a lower income

More dramatic, but possible quite popular would be the introduction of extra taxes aimed at Britain's two-million buy-to-let investors. They have already seen a tightening of capital gains tax rules.  Whatever happens on the 7th May Enable’s IFA’s can help you work through the implications for your financial planning.




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

Pensioner Bonds AKA Granny Bonds are back...

Making sure you near cash savings are in the best place is something Enables experienced financial advisors in Bishop’s Stortford would always recommend. It is often the case that the NS&I offer some of the best bonds and last week the Government’s eagerly-awaited market-leading Pensioner Bonds went on sale. Inevitably the high demand created problems on the National Savings and Investments website but the popularity of the bond was not a surprise given that the one-year bond pays 2.8 % while the return on the three-year bond is 4%.

Anna Bowes of Savingschampion.co.uk. has done the comparisons and it's clear, “The rates are head and shoulders above the nearest competition, paying 51 per cent more than the average 'top five' one-year fixed rate, and 61 per cent more than the average 'top five' three-year fixed rate,” Only those aged 65 and over however are allowed to invest in these Pensioner Bonds. Even if you are 65 or over and want to invest you will only be allowed to save £10,000 in each bond. But you can put that sum into both of the bonds on offer, meaning you could save £20,000 in each of the high-paying accounts and couples are allowed to put £40,000 in between them.

This offer will not be ongoing as the Government has set a £10 bn limit on the bonds, which means, that if everyone invested the maximum £20,000, only half a million pensioners would be able to buy the bonds. It is likely that if the issue is over-subscribed the bonds will be handed out on a first-come, first-served basis. If you want to apply online is very likely to be the best way. Enables IFA’s in Bishop’s Stortford are here to talk through other options for your savings.

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 

Pensions: What happens to my annual pension allowance once I take money out?

From next April 2015, the chancellor wants you to be able to do what you like with your pension savings once you reach age 55. With the new freedoms come a set of new rules that can be confusing. Enable’s retirement planning advisors in Bishop’s Stortford want you to be aware of any pitfalls in the new system.  Another thing to be aware of is that once you have taken money out of your pension savings beyond just the tax-free lump sum, the amount you will be allowed to put into pensions in future will be significantly reduced. If you take only your tax-free cash and nothing else, then your annual allowance stays at £40,000 a year. However, as soon as you take money out of a flexi-access drawdown account, or make just one bank-account style withdrawal, you will not be allowed to put more than £10,000 a year into a defined contributions pension scheme again.  (NB Those who have a final salary-type pension will still be able to contribute £30,000).

The new pension rules may seem exciting but as with everything they come with conditions and if you don't really need to take the funds out  or your pension and want to have the chance to build up more pension, Enable's IFA’s of Bishop’s Stortford would suggest thinking very carefully before you take more than your tax-free cash lump sum. There is much to think about in the brave new world of pensions Enables IFA’s wan to help you make the best decisions for you.



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

Mortgages taken out at highest level since 2007

As experienced Mortgage Brokers in Bishop’s Stortford Enables independent financial advisors have seen lots of changes in the housing market over time. Recently it is interesting to note that despite signs of a slowdown in late summer, figures from mortgage lenders showed that from July to September 188,000 mortgages worth a total of £32.4bn were advanced to first-time buyers and home movers. The Council of Mortgage Lenders said that this was “the highest totals since the final three months of 2007 when the housing market downturn was just beginning”.

It is also the case however, that although rising house prices mean the value of those loans has almost returned to its pre-crisis level, the number was still below the 223,900 recorded in quarter four of 2007, and lower than in any quarter between 1996 and 2008. And the number of borrowers re-mortgaging has picked up, rising by 20% during the month, although despite a fierce price war breaking out between lenders, it was still down by 12% on September 2013.

Paul Smee, director general of the Council of Mortgage Lenders said it had been a year of change, transition and growth as banks and building societies have got to grips with new rules on lending.
He added: “The lending market is healthier than it was a year ago, and set to remain so. Re-mortgaging has returned as a driver of lending volume in the buy-to-let sector. But any fears of over-heating in the housing market are now dissipating as house purchase lending activity seems to be softening.” Whatever your mortgage requirements Enable’s IFA’s in Bishop’s Stortford are here to help.

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

Town or Country?

As experienced mortgage brokers in Bishop’s Stortford Enables IFA’s know that it its life style choices that often determine whether we want to live in the town or the country.  But a recent survey indicates that a home in the country costs a quarter more than a home in an urban area, on average at the moment.

Interestingly research conducted by Halifax one of the UK’s leading mortgage lenders found the least affordable rural area was Chiltern district, between London and Oxford, where at an average of £477,526 homes cost 9.5 times local average earnings. The Cotswold district was next, with an average house price of 9.4 times the local salary, at £339,052.

On average homes in rural Britain attracted a premium of £46,475, selling for £225,217 against the typical cost of £178,641 in urban areas outside Greater London. Inevitably the least affordable rural areas were all further south. Across rural Britain, Halifax said, homes cost 6.8 times the typical salary, against 5.6 times salary across urban areas outside London. As a result, first-time buyers are struggling to afford them.

Martin Ellis, housing economist at Halifax, said: “It typically costs significantly more to buy in rural areas with a substantial premium existing in all the regions of Great Britain. This reflects the aspiration of many to own a property in the countryside. As one of the leading mortgages brokers in Bishop’s Stortford Enables experienced IFA’s can help people wanting to move either from town to country or country to town to suit their current life style choices or needs.

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 is a Personal Pension the basics?

A personal pension is exactly what it says on the tin and you can have one if you're employed but not in a company pension scheme, or you might want to have one in addition to a company pension. Or if you are self employed you may want to set up a personal pension or even if you are not working but can afford to put aside money for retirement you can have a personal pension.

You can pay a regular amount (usually monthly or annually), or a lump sum to the pension provider who will invest it on your behalf. The overall final value of your pension will depend on how much you have contributed over the years and how well the fund's investments have performed. Charges are made for setting up and running your pension and are normally deducted from your fund in the form of fund management charges.

The Annual Allowance for pension contributions is £40,000pa from 6 April 2014 this includes both employee and employer contributions. You can carry forward unused contributions from the previous three years (ie. back to 2011/2012 for 2014/15), potentially allowing contributions of up to £160,000 in a single year. HMRC has confirmed that you do not need to have made a contribution to a pension scheme in a year to be able to carry forward unused allowances – you simply need to have been a member.

For each pound you contribute to your scheme, the pension provider claims tax back from the government at the basic rate of 20 per cent. In practice, this means that for every £80 you pay into your pension, you end up with £100 in your pension pot. Enable’s IFA’s can help you decide if you want to set up a Personal pension.

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

Robots on the horizon

Enable's IFA’s in Bishop’s Stortford know it is hard to predict the future for investments but if you believe robotics are the future you might be interested to hear that EFT securities recently launched a fund to track the global robotics industry.

The Robo-Stox Global Robotics and Automation GO Units ETF has been listed on the London Stock Exchange and is the first ETF offering focused exposure to companies into robotics. It was developed by Robo-Stox, almost 40 per cent of the index’s companies are North American, with 35 per cent in Asia. Europe makes up just 22 per cent.

Robo-Stox Partners chief executive Richard Lightbound says the world is in the early stages of a “transformational new economic era” founded on robotics slowly becoming more and more part of our daily life. “After the rise of the internet age rapid advances in technology such as machine vision, motion sensors and image and voice recognition are enabling robots to perform increasingly sophisticated and delicate knowledge-based work,” he explains.  “Ageing populations and shrinking workforces will accelerate this trend.”

The annual global supply of industrial robots more than doubled to 170,000 units over the decade to 2013, according to the International Federation of Robotics.  Howie Li says “the robotics and automation industry includes heavy-duty factory lines as well as companies making automatic vacuum cleaners,” also “there are lots of sectors that will be looking at robotics, like agriculture and mining.” If you want to try and make sure your investments are linked to future trends Enables IFA’s in Bishop’s Stortford are here to help.

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

Which? Is the one to trust...

Our reliable Independent Financial Advisors at Enable in Bishop’s Stortford can see why the executive director of Which? Richard Lloyd has suggested that the Treasury needs to “pull its finger out." He wants the government to publish details of exactly how the guidance guarantee for pensions that has been proposed will work. He was Speaking at a fringe event at the Liberal Democrat conference in Glasgow recently and thinks that the Treasury is leaving it late as the new system will be launching within months.

The new system initiated by George Osborne as part of his radical pension reforms means that all the UK population over 55s will have the right to “free, impartial, face-to-face” guidance from next April.   Richard Lloyd, who was and advisor to ex-Prime Minister Gordon Brown from 2007 to 2010, said: “The Treasury needs to pull its finger out and work out who is going to provide guidance and how, and put standards in place. “It’s getting a bit late in the day for the details to be published and all the agencies involved need to be ready. It’s becoming a bit of a problem to say the least and the Treasury needs to speed up its decision making on how the guidance guarantee will be delivered.”

At the Labour conference, the shadow pensions minister Gregg McClymont has also called for more details to be published soon. Some advisors are asking for a delay so that the plans can be clearly thought through and delivered.  If you are simply wanting some straight forward one to one discussion on the best management of your pension Enable’s IFA’s can help.

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

Further Pension changes to come

George Osborne has declared that from 6th April 2015 inheritance tax will change alongside other changes to pensions. On death you will be able to pass on your pension cash without your heirs being forced to pay over half to the taxman.

Currently when a saver dies they must pay a 55 per cent tax charge to pass their drawdown fund to their loved ones.  The only exception has been for under  75 year olds who have not touched their pension. Only spouses and dependent children under the age of 23 have been able inherit their pensions without paying a tax charge.

But from next April anyone inheriting pension cash from someone who dies before the age of 75 will not have to pay any tax at all.  Those who inherit a pension from a loved one who passes away after the age of 75 will pay tax on money they withdraw at their normal rate of income tax. For many people this can be as little as 20 per cent. If they however withdraw a one off lump sum tax at 45 per cent will be levied.

It is important to remember that he shakeup applies only to savers who keep their money invested in the stock market and use their pension funds for income, using a method known as income drawdown which allows people to drawdown cash as they require it, instead of using their pension pot to buy an annuity.  If these changes are turning your financial planning upside down Enables’ IFA’s of Bishop’s Stortford are here to help you get things in order.

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

Should pension providers be forced to scrap exit fees?

Enable’s IFA’s in  Bishop Stortford know much has been made of the impact of exit fees on pension pots and the effect they would have on savers’ability to enjoy the new pensions freedoms come April. George Osborne’s pensions budget was sold around the idea of freedom – savers can finally do what they want with their pots. But exit fees, of up to 35 per cent, would act as a very effective disincentive to transfer savings anywhere else to allow access to the range of new options.

There have been calls for the Government to intervene on savers’ behalf, but Steve Webb The pensions minister recently played down the scale of the problem. Many of these policies were written decades ago when the pensions world was completely different, some policies were designed around the idea that the running costs of the pension – including the commission paid to advisers for selling them ¬– were paid back over the life of the policy. However, some customers chose to pay all their charges up front, meaning they would lose out compared to those who pay them over time if early exit charges were waived.

Rowley Turton director Scott Gallacher says it would be difficult for the Government or the FCA to get rid of the contracts and that, more importantly, such a move would “destroy confidence in anyone investing in the UK pensions industry”. “It makes it hard for anyone to launch in the market if they can’t be sure of fees. We should have seen a flood of European companies coming to the UK, but apart from Now: Pensions I’d struggle to find anyone who has made a success of coming here.”

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

If you are thinking of Buy-to-let do the maths

Enable’s Independent Financial Advisors in Bishop’s Stortford know that many, as part of their pension plan consider buy-to –let as a good investment but make sure you have done your maths before you jump in. 

The first thing to do is to have a really good think about the cost of houses you are looking at and the rent you are likely to get. Traditionally buy-to-let lenders wanted rent to cover 125% of the mortgage repayments, although many had relaxed this in the tail-end of the boom years. Most also looked for a 15% deposit, which protects against falling prices.  After the financial crisis, many are now demanding 25% deposits, or even larger, for rates considerably above residential mortgage deals. The best rate buy-to-let mortgages usually come with large arrangement fees.

Existing investors should now be benefiting from lower rates, and the slashing of base rate down to 0.5% has done them a favour. This is especially true for many as a lot of buy-to-let deals do not have typical SVRs but a revert rate that tracks the bank rate.  However, new buy-to-let mortgage deals remain expensive in comparison to residential deals.

To compare different property's values use their yield: that is annual rent received as a percentage of the purchase price her is the maths. For a property delivering £10,000 worth of rent that costs £200,000 has a 5% yield. But you have to remember, if you are buying with a mortgage, rent-to-property price yield will not be the return you get.  If you want to look at property as part of your wealth management portfolio Enable’s IFAs are happy to talk you through your options.

Your home is at risk if you do not keep up your mortgage repayments.

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

Understanding ETF’s

Making sure you have some idea of what is in your investment portfolio is always a good idea. Many managed portfolios include ETF’s.  In some ways, exchange-traded funds (ETFs) are similar to "ordinary" unit trusts. They are pooled collections of shares (or other assets such as bonds) that allow investors to buy a diversified portfolio with a single purchase. ETFs tend to be "tracker" funds, meaning that they automatically buy the holdings in a particular index in order to mimic its performance.

ETF’s however differ from conventional trackers because they are traded on the stock market like any other share. This means they can be bought and sold buy easily, and you always know the price. With unit trusts, you place your order but discover the price only when the transaction has gone through. You might think a fund traded on the stock market sounds like an investment trust. However, investment trusts issue a fixed number of shares, whereas ETF shares can be created and cancelled in response to demand. The practical effect of this is that they are very unlikely to trade at a discount or premium to the value of their holdings.

The funds come in two forms. The first type buys the actual shares or bonds found in the index that it aims to track. This kind is called "physically replicating" and is seen as safe, especially for the major indices such as the FTSE 100. The other kind uses complex financial instruments called "derivatives" to mimic the performance of the index concerned.  If you want to know more about the types of investment available or more about the investments made in your portfolio Enable’s Independent Financial Advisors can explain their pros and cons more fully.

How is your Mortgage Brain?

Technology once again is working for all parties in the financial news this week it has been noted that UKMortgages, the application launched by Mortgage Brain, has been downloaded more than 81,000 times since launching in 2012. Consumers have accessed and used the mortgage search tool more than 826,000 times in that period. As a result of using the application, consumers have also viewed broker contact details more than 43,000 times. The application is available across the iPad, iPhone and Android platforms as well as on Windows 8 and Windows Phone devices.

Owned by six of the UK’s largest mortgage lenders Barclays, Lloyds, Nationwide, RBS, Santander and Virgin Money, Mortgage Brain was started as a mortgage- sourcing provider but has now evolved through organic development and acquisition to offer a range of mortgage software from mortgage client management software through sourcing and application submission and most recently the provision of apps for both advisers and consumers.

In a world where consumers increasingly run their lives digitally through mobile devices and smart phones, these apps it is a great place if you are a potential buyer to begin your homebuying experience. The app includes tools which enable you to work out how much you can borrow and how much monthly payments will be and it can help calculate if money can be saved by remortgaging as well as the impact of rates changing and overpayment. Enables Independent Financial Advisors know that when it comes to trying to find the right mortgage it’s still the case that many brains are better than one even if one is a high speed digital one!

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

Lending moving into different suppliers

It was with interest that Enables IFA’s noted that at the beginning of this month more competition appeared in the mortgage market as two Indian lenders opened for business in the UK.  One is the State Bank of India, who have begun lending again on buy-to-let mortgages after pulling out of new lending in September 2012. The other is Axis Bank, one of India’s largest banks, which is also considering a launch in the buy-to-let market.

It will be interesting to see how their services develop . John Charcol senior technical manager Ray Boulger says: “One would hope and expect that State Bank of India has learned from its previous mistakes. To make a mistake once is forgivable for lenders that are new to the market; to make it twice is not. ”He says: “Obviously, the best way to step into a new marketplace is to dip your toe in. Lenders need to understand not just the industry they are working in but the market as well. That means speaking with existing players in that locality, exploring distribution channels and getting the lay of the land.”

“State Bank of India previously wanted to be the best on rates in its particular market and we saw what happened: it got inundated with applications and had to shut down its operation. That is an example of the wrong approach.”  It would seem that the right approach would be to find a gap in the market and target lending where there are not enough options for borrowers.  The Financial Conduct Authority is reviewing three banking licence applications and is in talks with a further 19 prospective lenders.

Your home might be at risk if you do not keep up your mortgage repayments. 

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

Housing Costs

It would have been hard to miss Mark Carney recently stating that the housing market represented the "biggest risk" to financial stability and the long-term recovery in the UK.  In an interview recently on the Murnaghan show on Sky news, he said the Bank was "closely watching" rising property prices and the subsequent increase in large-value mortgages, which he warned could lead to a "debt overhang" which could destabilise the economy.

 So what are the possible routes to cooling down raging house prices? It could be argued that making it harder for homebuyers to borrow money is already happening with MMR. But some lenders still offer loans that are more than five times a borrower's income. The Financial Policy Committee (FPC) could act to limit such borrowing as soon as next month, they could also make it more difficult to lend so banks and building societies would be forced to raise more capital.   Of course interest rate rises loom but  Mr Carney has promised not to use base rates as a means to cool the market.  Many say the government's Help to Buy scheme - which allows buyers to find a deposit of just 5% -is helping to inflate house prices so the BofE could advise that the scheme is scaled back. The Business Secretary, Vince Cable, has already said it should only apply to properties up to a maximum value of £350,000, rather than the current £600,000.  

But if Help to Buy has helped to put up house prices, remember it has also helped to increase the supply of housing. Private house building has increased by 34% in the year since the scheme started. Without it, the shortage of houses might have been worse, so prices might have been even higher. If you are looking to buy a home of your own Enable’s IFA’s in Bishops Stortford are happy to talk you through your options.

Your home is at risk if you do not keep up your mortgage repayments. 

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