Enable Independent, Independent Financial Advisors in Bishop’s Stortford were pleased to see that the Bank of England have expressed that they are ready to take aggressive action against UK lenders to protect the UK from a boom and bust economy.
The Financial Policy Committee, who were set up to safeguard the stability of the banking system, published a draft policy covering the powers it will have when it launches in April this year.
The Committee will have the authority to stop banks from issuing large mortgages or commercial property loans to increase their defenses in the good times to absorb losses in an economical downturn.
This type of regulation will be controversial as it increases the cost of mortgages and will make it difficult for would-be buyers to get the funds they need to get on the first run of the ladder.
However the Bank have stated that better regulation will lead to a decline in bad loans and will help prevent the sort of property booms and busts.
There are some indications of the housing market slowly improving. A survey carried out by e.surv, showed that 2012 was the best year for mortgage lending since 2007, and lending to first time buyers was up by 11 per cent.
Wednesday, 16 January 2013
Watchdog force gyms to stop unfair joining terms…
Enable Independent IFA’s of Bishop’s Stortford were really pleased to see that Watchdog is cracking down on Gyms tie in policies for customers across the UK.
At this time of year many people join the gym to get fit, but are not made aware of the terms and conditions of their contracts, and so they often get locked into a two years contract, even if they are not using the gym.
The Office of Fair trading has taken one company, Ashbourne Management, who draws up agreements and collects payments from 700 gyms across the UK to court, over unfair terms, and they have also put many other gyms on notice to make their terms and conditions clearer.
OFT spokesman Cavendish Elithorn said: ‘We are investigating a number of companies that operate fitness club chains or provide management services to gyms over concerns about unfair terms or business practices.
‘These include tying consumers into lengthy terms with limited rights to cancel should their circumstances change, and using misleading debt collection practices.’
The judge ruled that Ashbourne Management’s gym contract was unfair as it ties people into a contract for longer than 12 months and allow the consumer to cancel with 30 days notice, without a huge financial penalty.
In light of these changes several gyms have cut their contracts to a maximum of 12 months. If you are considering a gym membership why not look around for one that offers a rolling contract, where you can cancel at any time, such as Just Gyms in Saffron Walden.
At this time of year many people join the gym to get fit, but are not made aware of the terms and conditions of their contracts, and so they often get locked into a two years contract, even if they are not using the gym.
The Office of Fair trading has taken one company, Ashbourne Management, who draws up agreements and collects payments from 700 gyms across the UK to court, over unfair terms, and they have also put many other gyms on notice to make their terms and conditions clearer.
OFT spokesman Cavendish Elithorn said: ‘We are investigating a number of companies that operate fitness club chains or provide management services to gyms over concerns about unfair terms or business practices.
‘These include tying consumers into lengthy terms with limited rights to cancel should their circumstances change, and using misleading debt collection practices.’
The judge ruled that Ashbourne Management’s gym contract was unfair as it ties people into a contract for longer than 12 months and allow the consumer to cancel with 30 days notice, without a huge financial penalty.
In light of these changes several gyms have cut their contracts to a maximum of 12 months. If you are considering a gym membership why not look around for one that offers a rolling contract, where you can cancel at any time, such as Just Gyms in Saffron Walden.
The biggest shake up to flat rate pensions in over a century…
Enable Independent, IFA’s of Bishop’s Stortford took interest in the new state pension, the government unveiled the biggest shake up to the flat rate pension for over a century, and will benefit couples and stay at home mums the most.
The pension which is due to be introduced in 2017 will be more than £155 per week, and will no longer being means tested. However under the new scheme an individual will build up state pension entitlements after one year of paying National Insurance contributions, however under the new system this will be increased to ten years.
Prime Minister David Cameron stated: 'A single state pension cuts out a lot of the means-testing and also will help a lot of women, a lot of low-paid people who otherwise wouldn’t get a good state pension.
'So a good idea, but it’s long-term – this is for new pensioners, I don’t want to mislead anyone.'
The age of retirement will also rise under the new plans, those teenagers today will probably have to work until the age of 70 before they can claim.
The single tier pension will benefit women the most, as they will no longer be penalised for staying at home and looking after the children, couple’s will also benefit as they will also qualify for the new payment, rather than the less generous one currently in place.
A single tier will enable people to know what they can expect from the state once they reach retirement age. Thirty-five years of NI contributions will result in a full basic state pension.
However for those people who are tied into final salary schemes, they will face higher National Insurance payments, as the right to opt out of the state pension comes to an end.
If you are nearing retirement or need to start planning towards your future, why not give your local, friendly team of Ifa’s a call we will be more than happy to help you plan for your retirement.
The pension which is due to be introduced in 2017 will be more than £155 per week, and will no longer being means tested. However under the new scheme an individual will build up state pension entitlements after one year of paying National Insurance contributions, however under the new system this will be increased to ten years.
Prime Minister David Cameron stated: 'A single state pension cuts out a lot of the means-testing and also will help a lot of women, a lot of low-paid people who otherwise wouldn’t get a good state pension.
'So a good idea, but it’s long-term – this is for new pensioners, I don’t want to mislead anyone.'
The age of retirement will also rise under the new plans, those teenagers today will probably have to work until the age of 70 before they can claim.
The single tier pension will benefit women the most, as they will no longer be penalised for staying at home and looking after the children, couple’s will also benefit as they will also qualify for the new payment, rather than the less generous one currently in place.
A single tier will enable people to know what they can expect from the state once they reach retirement age. Thirty-five years of NI contributions will result in a full basic state pension.
However for those people who are tied into final salary schemes, they will face higher National Insurance payments, as the right to opt out of the state pension comes to an end.
If you are nearing retirement or need to start planning towards your future, why not give your local, friendly team of Ifa’s a call we will be more than happy to help you plan for your retirement.
Monday, 7 January 2013
Highest number of employed since records began
In an upbeat report from the Office for National Statistics (ONS) in late December, it was stated that unemployment fell by 82,000 to 2.51 million in the period between August and October bringing the national rate down to 7.8%, a 0.2% drop from the previous quarter, which is the largest quarterly fall since 2001.
Employment also rose by 40,000 to show 29.6 million in work. This is the highest number of people in employment since records began. The private sector recorded an increase of 65,000 workers to 23.8 million. However, the public sector continued its decline, losing 24,000 workers to 5.7 million.
The minister for work and pensions, Mark Hoban, commenting on these figures was quoted as saying: “We see more people looking for work and actually finding work, so I think there’s a really strong labour market there.
“I think there’s more flexibility in the labour market, although this month we’ve seen a big increase in full-time jobs and no movement at all in the number of part-time jobs.”
On the down side total pay was only up 1.8% compared to the same period last year and therefore still below the rate of inflation. This lack of wage growth is likely to dampen consumer demand.
Meanwhile, the Office for Budget Responsibility, who are responsible for the veracity of economic forecasts on behalf of the economy, cut their forecast of the future peak of unemployment to 8.2%, which is considerably higher than the
7.8% reported by the ONS.
On behalf of the opposition, Liam Byrne, the shadow work and pensions minister stated: “Pay packets are under intense pressure as the pace of jobs growth slows down – wages are now growing at only half the rate of prices.
“Families are under real pressure right now and what today’s figures show is that the Department for Work and Pensions’ big back-to-work programmes are frankly delivering nothing.”
This is part of our monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future. It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements.
Employment also rose by 40,000 to show 29.6 million in work. This is the highest number of people in employment since records began. The private sector recorded an increase of 65,000 workers to 23.8 million. However, the public sector continued its decline, losing 24,000 workers to 5.7 million.
The minister for work and pensions, Mark Hoban, commenting on these figures was quoted as saying: “We see more people looking for work and actually finding work, so I think there’s a really strong labour market there.
“I think there’s more flexibility in the labour market, although this month we’ve seen a big increase in full-time jobs and no movement at all in the number of part-time jobs.”
On the down side total pay was only up 1.8% compared to the same period last year and therefore still below the rate of inflation. This lack of wage growth is likely to dampen consumer demand.
Meanwhile, the Office for Budget Responsibility, who are responsible for the veracity of economic forecasts on behalf of the economy, cut their forecast of the future peak of unemployment to 8.2%, which is considerably higher than the
7.8% reported by the ONS.
On behalf of the opposition, Liam Byrne, the shadow work and pensions minister stated: “Pay packets are under intense pressure as the pace of jobs growth slows down – wages are now growing at only half the rate of prices.
“Families are under real pressure right now and what today’s figures show is that the Department for Work and Pensions’ big back-to-work programmes are frankly delivering nothing.”
This is part of our monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future. It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements.
UK property records an annual increase in price
In encouraging news, UK property prices saw a 0.2% increase in November, raising the annual price increase to 1.5%, leaving the average house now costing £231,000, slightly off their recent peak value of £234,000, which was recorded in July and August.
These figures, released by the Office for National Statistics (ONS) in December, fly in the face of recent surveys from Nationwide and Halifax, who are amongst the UK’s largest lenders, who both reported slight price falls over the last year.
Not surprisingly, the ONS report also confirmed that the largest and fastest increases were recorded in London, but this did not skew the data, as if both London and the South East prices were taken out of the equation, the national price was still higher than a year ago.
Confirming these findings, the ONS said: “House prices continue to remain relatively stable across most of the UK, although prices in London are increasing and prices in Northern Ireland are falling.
“The year-on-year increase reflected growth of 1.8% in England and 2.8% in Wales, which were offset by a decline of 2.2% in Scotland and 11.7% in Northern Ireland.”
Whilst this is welcome news, especially for home-owners, the modest annual increase shown does not represent a general revival in house prices and the market remains subdued in activity.
As reported in another article here (Funding for Lending), the Government’s Funding for Lending Scheme (FLS) is starting to gain momentum and, hopefully, will start to prime the first-time buyer market, which in turn may increase market activity in the housing pipeline in the medium to long-term across the country.
These figures, released by the Office for National Statistics (ONS) in December, fly in the face of recent surveys from Nationwide and Halifax, who are amongst the UK’s largest lenders, who both reported slight price falls over the last year.
Not surprisingly, the ONS report also confirmed that the largest and fastest increases were recorded in London, but this did not skew the data, as if both London and the South East prices were taken out of the equation, the national price was still higher than a year ago.
Confirming these findings, the ONS said: “House prices continue to remain relatively stable across most of the UK, although prices in London are increasing and prices in Northern Ireland are falling.
“The year-on-year increase reflected growth of 1.8% in England and 2.8% in Wales, which were offset by a decline of 2.2% in Scotland and 11.7% in Northern Ireland.”
Whilst this is welcome news, especially for home-owners, the modest annual increase shown does not represent a general revival in house prices and the market remains subdued in activity.
As reported in another article here (Funding for Lending), the Government’s Funding for Lending Scheme (FLS) is starting to gain momentum and, hopefully, will start to prime the first-time buyer market, which in turn may increase market activity in the housing pipeline in the medium to long-term across the country.
Markets: (Data compiled by The Outsourced Marketing Department)
The political impasse was taken to the wire over the anticipated American ‘Fiscal Cliff’ with no resolution offered at the close of the markets in December.
Therefore, most global markets remained muted awaiting news from across the pond.
The Dow Jones finished the year on 13,104.14, up a marginal 0.6% on the month, and 1.2% on the year. The Nasdaq closed on 3,019.51 to record a monthly rise of 0.31% but an impressive gain of 15.9% for the year.
Here in the UK the FTSE100 ended 2012 on 5,897.8 to show a monthly gain of 0.53% and a 5.8% improvement for the year.
The wider FTSE250 closed out at 12,375.0, a 2.83% rise since November and recording a splendid 22.4% gain for the year. The junior AIM market finished the year on 707.21 improving a modest 2.91% for the month which mirrored its annual gain of 2.0%.
Elsewhere, the Eurostoxx50 closed out a turbulent 2012 at 2,635.93, a 2.36% gain for the month and a 13.7% improvement for the year. The Nikkei finished at 10,395.18, up a healthy 10.05% for the month and very respectable 22.9% for
the year.
On the currency markets, sterling finished 2012 at $1.63 against the greenback and €1.23 against the Euro to record respective annual gains of 4.4% and 3.3%.
The Euro also had an annual gain of 2.3% against the US Dollar ending the month at $1.32. The Brent Crude benchmark for oil saw the black gold finish 2012 at a symbolically symmetrical $111.11, a monthly gain of 1.46% and a modest rise of 3.4% for the year. Gold recorded yet another year of gains, this year rising by 9.4% to close out the year at $1,675.90.
This is part of our monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future. It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements.
Therefore, most global markets remained muted awaiting news from across the pond.
The Dow Jones finished the year on 13,104.14, up a marginal 0.6% on the month, and 1.2% on the year. The Nasdaq closed on 3,019.51 to record a monthly rise of 0.31% but an impressive gain of 15.9% for the year.
Here in the UK the FTSE100 ended 2012 on 5,897.8 to show a monthly gain of 0.53% and a 5.8% improvement for the year.
The wider FTSE250 closed out at 12,375.0, a 2.83% rise since November and recording a splendid 22.4% gain for the year. The junior AIM market finished the year on 707.21 improving a modest 2.91% for the month which mirrored its annual gain of 2.0%.
Elsewhere, the Eurostoxx50 closed out a turbulent 2012 at 2,635.93, a 2.36% gain for the month and a 13.7% improvement for the year. The Nikkei finished at 10,395.18, up a healthy 10.05% for the month and very respectable 22.9% for
the year.
On the currency markets, sterling finished 2012 at $1.63 against the greenback and €1.23 against the Euro to record respective annual gains of 4.4% and 3.3%.
The Euro also had an annual gain of 2.3% against the US Dollar ending the month at $1.32. The Brent Crude benchmark for oil saw the black gold finish 2012 at a symbolically symmetrical $111.11, a monthly gain of 1.46% and a modest rise of 3.4% for the year. Gold recorded yet another year of gains, this year rising by 9.4% to close out the year at $1,675.90.
This is part of our monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future. It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements.
Funding for Lending starts to work
The Funding for Lending (FLS) scheme - introduced earlier this year by the Bank of England to offer cheaper funded money amounting to approximately £60bn to banks and building societies to enable them to lend-on to individuals and smaller businesses – is showing signs of starting to work.
Although in early December they reported that only £4.4bn of funds had been drawn on by only six lenders. Whilst emphasising that they did not expect to see the full picture until into the New Year, the Bank of England stated that early signs of take-up were good. In their quarterly bulletin they said: “FLS should lead to more and cheaper credit flowing into the real economy than otherwise.
“Early signs have been encouraging: market funding costs for UK banks have fallen sharply and many loan rates have fallen.
“But given the usual lags from credit being offered to loans being made, the FLS is unlikely to materially affect lending volumes until 2013.”
One negative aspect of this initiative is that savers rates have also declined, as the banks and building societies involved are under less pressure to raise funds from the wider market place.
Being just one of many initiatives introduced to try to boost the economy; FLS joins quantitative easing as another arrow in its reflationary quiver. Here they have injected £375bn of ‘new’ money into the banking system and they have held interest rates at an historical low of 0.5% for nearly four years.
Echoing the Bank’s comments, Mike Cherry, of the Federation of Small Businesses (FSB) was quoted as saying: “The cost of borrowing is beginning to slightly fall, so there is some sign that FLS is having an impact.
“There has been an increase in the number (of loans) that have been approved straight away.”
This is part of our monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future. It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements.
Although in early December they reported that only £4.4bn of funds had been drawn on by only six lenders. Whilst emphasising that they did not expect to see the full picture until into the New Year, the Bank of England stated that early signs of take-up were good. In their quarterly bulletin they said: “FLS should lead to more and cheaper credit flowing into the real economy than otherwise.
“Early signs have been encouraging: market funding costs for UK banks have fallen sharply and many loan rates have fallen.
“But given the usual lags from credit being offered to loans being made, the FLS is unlikely to materially affect lending volumes until 2013.”
One negative aspect of this initiative is that savers rates have also declined, as the banks and building societies involved are under less pressure to raise funds from the wider market place.
Being just one of many initiatives introduced to try to boost the economy; FLS joins quantitative easing as another arrow in its reflationary quiver. Here they have injected £375bn of ‘new’ money into the banking system and they have held interest rates at an historical low of 0.5% for nearly four years.
Echoing the Bank’s comments, Mike Cherry, of the Federation of Small Businesses (FSB) was quoted as saying: “The cost of borrowing is beginning to slightly fall, so there is some sign that FLS is having an impact.
“There has been an increase in the number (of loans) that have been approved straight away.”
This is part of our monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future. It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements.
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