CBI report fires off a new volley in the EU 'IN/OUT' debate

‘Brexit’ – the potential for the UK electorate to vote to leave the European Union would, according to a Confederation of British Industry (CBI) report, constitute a “serious shock” for the British economy. Their research warns of a cost of up to £100 billion to the economy and close to one million jobs by 2020. CBI director-general, Carolyn Fairbairn, warned of “a real blow for living standards, jobs and growth”.

The research looked at two outcomes following a Brexit decision – a free-trade agreement being swiftly agreed upon with the EU within five years or, if the UK decides to conduct business via membership of the World Trade Organisation, a more drawn-out period of negotiations. In either scenario, according to the report, short-term uncertainty would cause widespread insecurity among the business community; firms would delay implementing strategic investment decisions while the UK renegotiated the 50 deals around the world currently run through the EU.

However, Brexit supporter Peter Hargreaves, founder of funds supermarket Hargreaves Lansdown has spoken of an “absolute fillip” for the UK following an ‘out’ vote while fund manager savant Neil Woodford has commissioned a report by Capital Economics, which concluded that an EU exit would not have serious consequences in the longer-term, predicting a “nil sum game”. Neil Woodford himself believes that “the fundamentals of the economy will be relatively unmoved” and the vote would have a marginal effect on his investment strategy, given that the major companies in which he invests often have “absolutely nothing to do with the UK economy”.

Short-term uncertainty following ‘Brexit’ appears highly likely; but the Capital Economics report identified a greater threat, the lost productivity never regained since the financial crisis. “Regaining that lost ground” they argue “would offset even the most negative effects of Brexit on the economy”.

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

Long term fixed rate mortgages

In some European countries fixed rate mortgages lasting up to 30 years are on offer, Enables IFA’s in Bishops Stortford recently noticed one of the lowest 10 year fixed-rate mortgage on the UK market was offering 2.75pc for those with a 35pc deposit.

On this deal a 25-year £260,000 repayment mortgage would cost £1,206 per month and a total of £144,682 over the fixed term. This particular mortgage allowed 10pc capital repayments each year with no penalty and the early repayment charges diminished the longer the mortgage was held. There are of course other 10-year fixed deals on the market with varying terms and conditions.

The main advantage of a 10-year fix is the certainty it provides, on top of taking away all the hassle and cost of feeling the need to re-mortgage every few years to keep up with changes and make the best deal. Some of these long-term fixed rates are suddenly cheaper because many believe in the reduced chance of an interest rate rises, at the moment it would seem as if the market believes the first UK Bank Rate increase might be several years away.

The dilemma is weighing up a long term deal with multiple shorter-term deals with lower rates when there are sub 1.5pc two year fixes on offer and sub 2pc three year fixes. Rates would have to go up substantially for the current 10-year fixed rates to be cheapest on average over the long term but the costs and hassle of re-mortgaging every year or so are not guaranteed as the long term prediction of interest rates. Enables IFA's are happy to help you talk through the best decision for you.

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 

Over-50s at risk of pension scams

Experienced Independent Financial Advisors at in Enable in Bishop’s Stortford are concerned that a recent survey of 1,500 people over the age of 50 suggests that many are leaving themselves open to fraud, as well as the risk of running out of money in their later years, because they are not taking any advice or guidance over their pension pots.

An independent survey commissioned by the Observer in conjunction with insurer LV=, on the first anniversary of the introduction of pension freedoms, shows that only one in five of those within five years of retirement plans to take paid-for, regulated financial advice. Many of those who are planning to seek some sort of help say they will turn to friends and family (13%), their pension provider (16%) or the government’s free service Pension Wise (14%), which offers basic, free guidance rather than tailored advice.

On top of this, recent research released by Citizens Advice implies that almost nine in 10 people (88%) miss common warning signs of a pensions scam, things like unusually high investment returns, cold calling and offers of free financial advice. In their report, entitled Too Good to be True, a mismatch between people’s confidence in spotting a scam and the ability to do so was revealed. Three in four (76%) said they were confident they could identify a pension scam, but just 12% were actually able to do so when a scam was presented to them. Recent research shows 11 million people over 55 have been cold-called or sent a text about their pension. Make sure you have taken reliable regulated advice on your pension pot.

Source: The Guardian

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 

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