Back to School

Counting the cost of bringing up baby in Bishop’s Stortford?  Our Independent Financial Advisor's at Enable know it has always cost to have a family and can help you make sensible financial planning; savings and investments to help manage those costs. According to the Halifax the average cost of raising a child up to the age of 11 increased to £8,307 a year in 2011, the figure represents a 15 per cent increase over the last five years and means that it now costs more than £90,000 to raise a child to secondary school age.

It says inflation, as measured by the Retail Price Index, increased by 18 per cent over the past five years and parents now spend around 18 per cent, of their income on bringing up a child. Cost associated with education have increased by 24 per cent in the last five years, with uniforms, equipment, school lunches and school trips adding up to £849 in 2012. Child care costs have also increased, with nurseries and child-minding costs up by 22 per cent in 2011. Together, schooling and child care costs account for half of the total annual amount spent by parents on raising their children.

Spending on food and holidays fell in real terms, according to the study. In 2011 parents spent £889 feeding their children in 2011, an increase of 14 per cent from £780 in 2007, while the cost of holidays for children increased by 16 per cent to £740. Parents spent £513 on children’s clothing in 2011, 15 per cent less than in 2007.

The cost of buying a home is at an all time low – state Halifax

Halifax stated this week that the average cost of buying a home has fallen to the lowest in 15 years. They state that a typical mortgage on a new home now costs an average of 25% of take-home pay, compared to a staggering 45% at the peak, before the credit crunch.

Lowering prices and lower interest rates they say are making buying a home much more affordable, with the greatest affordability being in parts of the UK where house prices have been affected the most, such as Northern Ireland. However in the South East, an average new home buyer will need to part with slightly more of their income, as lack of properties on the market, have kept prices much the same as before the credit crunch, and buyers are having to part with 32-35% of their income to finance their new home, which is still lower than 2007 when the average home buyer had to part with 56% of their income.

Buying a home is much cheaper than renting. If you are looking to buy your first home or would like to find out more about the mortgages we have on offer at Enable why not contact us on 01279 755950, our IFA's of Bishop's Stortford have access to the whole market place, and all of our fees are completely transparent.

Clamp down on companies offering ‘no win, no claim’ on PPI’s

PPI, Payment Protection Insurance has been big news, with companies normally offering personal injury and industrial injury jumping on the PPI bandwagon, left right and centre. However this week the government has announced that as from 2013 the legal ombudsman will be responsible for complaints, meaning that consumers who have been provided poor customer service could be awarded compensation of up to £30,000.

The companies offering to make claims for miss-sold payment protection insurance, take a percentage of the compensation they receive on behalf of their customers, usually on a ‘no win, no claim’ basis, however their have been several claims that these companies have been asking for money up front and that they have been making false claims to customers.

The Ministry of Justice, MoJ’s annual report from 2011-2012, stated that it had cancelled or warned 400 claims firms in the year to March 2012, and that a staggering 93% of the complaints were about financial claims firms.

The new changes in 2013, which will be enforced by the CMRU, Claims Management Regulation Unit, will change the way in which these companies are regulated, getting rid of bad practice within the industry and protecting consumers. This is potentially great news for consumers.

Increasing wealth tax, will it drive out the rich?

There has been much talk this week about the UK economy being hampered if the coalition insists in pushing up tax for the rich, although it could be argued that most rich are already contributing far more than other people to the country.

Hollande, France’s new socialist President has also taken the same tact, to increase tax on the rich, which has met fierce opposition. But the question remains, although we have offered to lay out the ‘red carpet’ to France’s super rich, are we as a country not driving out the rich too, but just in a lesser degree, as we have already seen several hedge funds moving abroad.

George Osborne, Chancellor expressed his concerns over the new plans during his visit to Sunderland, where he stated:  "I am clear that the wealthy should pay more, which is why in the recent budget I increased the tax on very expensive property transactions. But we also have to be careful as a country we don't drive away the wealth creators and the businesses that are going to lead our economic recovery."

Nick Clegg has already agreed to cut the top tax rate from 50p to 45p and has since indicated that he intends to increase wealth tax, and we will see no more increase on income tax in the UK for the time being. The coalition sentiment is that by tax the richest in the country, with it’s proposed tax on homes of £2 million and over would help the country pay off it’s deficit and improve the economic situation for the long term. We will have to wait until September to find out what the new proposed changes are going to be at their party conference.  

NHS tries to generate funds by selling our health system abroad

News this week that the NHS ‘brand’ could be sold abroad attracted immediate criticism from the Patients Association, who are concerned that with an already stretched health system, could result in specialist hospitals concentrating on getting money from abroad rather than concentrating on its UK customers.

NHS trusts, with world-wide reputation, such as Great Ormond Street, could establish overseas clinics, increasing the revenue generated for the NHS.

Anne Milton, the Health Minster stated: "This is good news for NHS patients, who will get better services at their local hospital as a result of the work the NHS is doing abroad and the extra investment that will generate," she said.

"This is also good news for the economy, which will benefit from the extra jobs and revenue created by our highly successful life sciences industries as they trade more across the globe.

"The NHS has a world class reputation and this exciting development will make the most of that to deliver real benefits for both patients and taxpayers."

However the proof is in the pudding, and it will be interesting to see whether tax payers will appreciate sending our most valuable specialist service abroad, and whether as the Health minister states will increase jobs and boost the economy.

Public Pensions – Armed forces forced to retire 5 years later…

News this week that Armed forces could see their pension age rise from 55 to 60 under new government plans, has caused concerns to army personnel. 

The proposed changes will affect all service personnel under the age of 45, this is part of the government shake up to reduce the cost of public pensions.

Currently the armed forces have two main pension sections, for those who started between 1975 and 2005 and those who joined after that date. However in both sections, the retirement age was 55.

The government has stated that pension rights accrued under the exiting schemes will be protected, and the unique early retirement feature of the scheme will also remain. This is in the form of a lower level pension, and a lump sum is paid to service personnel with at least 18 years service, aged 40 or over. The length of time in service will rise to 20 years.

David Marsh secretary of the FPS stated: "This will mainly affect officers who tend to join after university rather than the other ranks who join about the age of 20," said David Marsh, pensions secretary of the FPS.

However the rest of the public sector pension ages are going to rise from 65 to 68, in line with an increased life expectancy. 

If you are in the armed forces and are concerned about the amount of pensions you will receive then get in touch with one of our IFA's. 

Which? states 'free' banking doesn't exist…

Which? the consumer group states that there are still large variations in the cost of current account charging to consumers, and the idea of ‘free’ doesn’t exist.

In its latest analysis of some of the main banks in the UK, it stated that the UK banking system ‘shatters the myth’ of free banking. Which? states the cost of going overdrawn without permission for two days could cost customers as much as between £120-£900 per annum.

However the British banking system have retaliated stating that the report is not correct as many customers could still access free banking in the UK – well as long as they don’t go overdrawn.

Which? chief executive Peter Vicary-Smith stated: "When some people are paying up to £900 a year in bank charges it completely shatters the myth that banking is free."

He added: "It's a disgrace that the very people who bailed out the banks are being asked to pay more for the most basic accounts, while the industry continues to be rocked by scandals like PPI mis-selling, Libor rate-rigging and IT failures.

"Banks must be far more transparent about their fees and charges so that people can clearly see what they already pay."

If you are unsure about your financial situation why not get in touch, we will be able to give you a review of your financial circumstances.