New savings allowance winners and losers

Enable’s IFA’s in Bishops Stortford are pleased that from last week anyone who earns interest on a savings or current account will no longer have 20% tax automatically deducted by their bank or building society. The new Personal Savings Allowance (PSA) allows earnings of up to £1000 a year to be tax-free. The accounts that qualify for the PSA are pretty much all bank and building society accounts; unit trusts; open ended investment companies; investment trusts; credit unions; government and corporate bonds; peer-to-peer lending, essentially all savings accounts and funds which do not make direct dividend payments.

But if you are an investor who relies on income from share dividends you will also be facing a new tax regime in which some will gain, but others will lose.  Under the old system, all taxpayers were subject to a 10% notional tax credit on dividend payments. As a result basic rate taxpayers you had no more money to pay while higher and additional rate taxpayers paid an effective tax rate of 25% or 30.56% respectively.

Under the new system, all dividends below £5,000 a year will be free of tax but above that level, basic rate taxpayers will pay 7.5%, and those in the higher rate will pay 32.5%. Those who receive less than £5000 a year in dividend income will therefore pay less in tax than they did or continue paying no tax at all. But those who receive dividends worth more than £5,000 will be paying more.

The government says 95% of taxpayers, and 75% of dividend recipients, will either gain or be unaffected they say around 1m people will pay less tax. But an extra 200,000 will now have to pay tax who didn't before. Enable’s IFA’s are here to help you understand the new savings allowances.

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.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

Fixed rate Mortgage falls

Enable’s IFA’s in Bishop’s Stortford know that making sure you have the best deal on your mortgage is a key part of financial planning. Earlier this year two and three-year fixed rate mortgage rates fell to record lows with borrowers accessing the largest number of  products since 2008, according to data compiled by the Mortgage Advice Bureau;  the average two-year fixed rate mortgage fell to 2.54pc in February, down from 2.56pc in January and the average three-year fixed rate mortgage fell to 2.92pc, down from 3.01pc the previous month, the average five-year fixed rate deal also dropped slightly, from 3.27pc in January to 3.25pc..

The data is good news not just for prospective homebuyers but also those looking to remortgage according to Brian Murphy, head of lending at the Mortgage Advice Bureau. “Falling rates are helping to ease the impact of rising house prices on borrowers," he said. "Over the past 12 months fixed rates have fallen steadily, meaning borrowers taking out a mortgage today can benefit from lower monthly repayments. “This is not only good news for prospective homebuyers: existing homeowners can look to take advantage of these low rates by remortgaging to a much better deal, particularly if they are on a poor value standard variable rate (SVR).”

The data revealed that the total number of mortgage products rose by 3pc in February to 17,654 – a substantial annual increase of 36pc from 12,940 in February 2015.But it has to be remembered that the pricing of new mortgage deals is influenced by the direction of travel for the Bank Rate. Currently the market prediction for the first rise being as late as 2020 could trigger another wave of even cheaper mortgage deals.

 Your home may be repossessed if you do not keep up repayments on your mortgage.

Source: The Telegraph

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 

UK first time buyer resilience in the darkest month?

According to the latest first time buyer tracker index Enable’s IFA’s in Bishop’s Stortford can see that first time buyers in the UK appear to be fairly resilient despite a month on month dip in property sales for FTBs.  People buying their first home increased by 6.6% year on year but month on month fell by 1.4% between January and February 2016 according to Your Move and Reeds Rains figures.

Adrian Gill, director of estate agents Your Move and Reeds Rains, reminds us that, “ February is a traditionally quiet period for the first time buyer market but the figures demonstrate the strong, steady underlying growth that comes with growing first time buyer confidence. While the more general mismatch between buyers and sellers will continue to exert upwards pressure on prices, a combination of pluck and poise from first time buyers will ensure that this does little to impact the overall trend of growing demand at this end of the market,’ he explained.

The figures also demonstrate that the costs of buying and owning a first home remained broadly stable in February, with lower borrowing costs balancing out larger prices and deposits. Overall the average mortgage rates for first time buyers have improved, down 0.56% on a 12 month basis and by a much slighter 0.03% between January and February 2016.  February’s average mortgage rate was the lowest mortgage rate for first time buyers in over five years.  The other factor is that the average LTV ratio remains high, so first time buyers have been able to borrow more against the value of the home they wish to purchase. February’s average loan to LTVs recorded in 2014/2015 and represents only a 0.1% fall on February 2015.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Source: Property Wire


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 

Inheritance Tax bill set to rise…

Enable’s IFA’s in Bishops Stortford have much experience in helping financial planning and Inheritance Tax is always a factor to consider. Recent Inheritance tax receipts for the 12 months to February 2016 published by the Office for National Statistics, show the inheritance tax bill is on track to be more than a fifth higher than last year.  The Government is expected to take £4.6bn in inheritance tax in 2015-16 compared to £3.8bn for the same period in 2014-15. Projections from Office for Budget Responsibility (OBR) also show that the number of family estates on which inheritance tax has to be paid has quadrupled since 2010, with the number up from around 10,000 to more than 40,000 this year.

At the moment estates worth up to £325,000 can be passed on without paying inheritance tax.  There is then a rate of 40pc tax payable over that threshold. This is due to change in April 2017 when the Government introduce an additional tax-free allowance which will ultimately allow homeowners to leave an extra £175,000 in property wealth. Making a property allowance of £500,000 for individuals or £1m for couples.  But the OBR data suggests that despite the new reforms, the number of families paying inheritance tax is still likely to soar in future years.

The Treasury may well want “hard-working families to be able to pass on their home to their children or grandchildren.” But more families will be pulled into the inheritance tax net than ever before and if you are paying inheritance tax now and just missing out on the higher allowances you might reasonably be feeling resentful it’s a tax that taxes something people have already paid income tax on.

Source: The Telegraph

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 incomes up since recession

Enable’s IFAs in Bishops Stortford are always ready to help people plan for retirement and it may come as a surprise to hear that retired people are 7.7% better off than in 2008 while workers' wages lag behind according to official figures.

The Government’s ‘triple lock’ – which guarantees state pensions will rise by at least 2.5 per cent every year – has been a factor behind the growth in retirement incomes, the Office for National Statistics said, meaning that most pensioners did not experience a drop in income during the recession, when workers were hit by rising unemployment and wage falls.

Increasing numbers of people investing in private pensions or annuities has also contributed to the rise in pensioner living standards. Retired people had an average income of £21,000 in 2014/15 – meaning they were £1,500 a year or 7.7 per cent better off than they were in 2007/08, adjusting for inflation. Pensioners have seen their incomes nearly triple since records began in 1977, even once inflation was taken into account, while workers’ incomes have only doubled.

Pensioners are much less likely to rely on the state pension than in previous decades. Retired households have also grown increasingly reliant on private pensions, with them making up 43 per cent of incomes in 2014/15 compared to 18 per cent in 1977.

The Pensions Minister said the Government was ‘committed to helping people enjoy a financially secure retirement’ adding, ‘Supporting people after they have worked hard all of their lives will continue to be a priority, especially as it can difficult for people to increase their incomes in retirement.’ Enable’s IFAs feel the same.

Source: This is Money


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 are we with ISAs? The deadline is approaching...

Traditionally, this is the time of year when Enable’s IFAs are busy making sure everyone has used their ISA allowance. It is normally a time when ISA providers boost their offerings to encourage savers to invest in ISAs before the start of the new tax year. This year however, rather than raising rates, providers have been cutting them; some savers are facing some of the worst cash ISA deals on record. Since the Budget, George Osbourne has announced that there will be a new ISA available from next year for savers under the age of 40, for more information please contact one of our team.

Charlotte Nelson, finance expert at Moneyfacts says, "ISAs were once the go-to product for savers as they offered not only tax benefits but also some of the better rates." "However, this is certainly no longer the case thanks to almost constant rate decreases."

One factor that’s been taking its toll on ISA rates is the personal savings allowance (PSA). The PSA, which is due to come into place in April, seems to have only added to the downward slide in ISA rates: soon £1,000 of interest earned will be tax-free, which means that the importance of getting an ISA each tax year has been reduced. But as ever diversification is important. "Relying on the PSA alone for your tax-free pot is a gamble – eventually rates will go up, and the amount savers can save tax-free will subsequently diminish." For this reason ISAs shouldn't be overlooked, particularly if you have larger amounts to save. In addition, ISAs can be passed on to spouses after death, which is worth contemplating when weighing up your long-term interests." Says Charlotte.

There's no guarantee how long the PSA will last, if the allowance is withdrawn in future years, your savings interest will be taxable again, whereas any money built up in an ISA will remain tax-free for life. So it’s probably still worth using up your ISA allowance and Enables IFAs in Bishops Stortford can help you find the best deals.

Source: Money facts


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 

Cost of housing in UK means more young people still living with their parents

Enables’ IFAs in Bishops Stortford have been seeing that more and more young people are returning to live with their parents and recent research only confirms that affordability issues mean that more young adults aged 20 to 34 in the are more likely to be sharing a home with their parents than any time since 1996.

In 2015 there were 618,000 more young adults living with their parents than in 1996 - 3.3 million rather than 2.7 million, according to the data from the Office of National Statistics (ONS). Their research indicates that the percentage of young adult householders owning their home decreased from 55% in 1996 to 30% in 2015 for 25 to 29 year olds and from 68% to 46% for 30 to 34 year olds.
Only 9% of 20 to 24 year old householders owned their homes either outright or with a mortgage or loan in 2015, down from 30% in 1996.

Between 1971 and 1999, the amount paid for a house by first time buyers with a mortgage fluctuated between two and three times their annual income. After 2000, this ratio increased rapidly, reaching a peak of more than 4.5 times their annual income in 2004 and has remained fairly stable since then. But in 2014 median house prices were 11 times median gross annual pay for 22 to 29 year olds, while median house prices for first time buyers were nine times median gross annual pay for 22 to 29 year olds. 

House prices may have risen but increases in earnings have not, it’s challenging times for you young people. Enable’s experienced IFAs in Bishops Stortford can help you to help them.

Source: Property Wire

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