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.
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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 

Budget: Small businesses and the Budget

Bishop Stortford based IFA’s at Enable can see that George Osborne’s most recent Budget speech has put small businesses at the centre for a change, this time small businesses  are the clear winners with big businesses picking up the bill.

One of the most challenging things for small businesses are business rates, which far exceed the amount they pay in corporation tax. To ease this burden Mr Osborne announced that 630,000 small businesses will pay no business rates at all from next year. He claims that this reduction will save £7bn per year for small businesses.

Commercial property investors will have to pay 0% for properties worth up to £150,000, 2% on the next £100,000 and 5% on properties above £250,000, in a move to help smaller firms.

Big firms face however will face a crackdown on practices which reduce taxable profits, including offsetting debt interest against profits and using losses in one year to offset profits in another.
The government says this combination of measures will raise £9bn.

Both big and small businesses will be grateful that he didn't raise fuel duty. The "feel good factor" that creates is at least as important as the threat of a Tory backbench riot. The overall picture for the economy may not be as many had hoped but there have been moves to help freelances and smaller businesses move forward.  Enable’s IFAs in Bishops Stortford can help you with your financial planning.

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 

Budget: Savers benefits

Enable’s IFAs in Bishop’s Stortford can see no downside to the new annual ISA limit being raised from £15,240 to £20,000 with a new “lifetime” ISA to help the under 40’s save by the government giving them £1 for every £4 saved and people who save a maximum of £4,000 towards a home deposit or retirement will get a £1,000 top-up from the state every year until they turn 50.

These also sit interestingly alongside the new personal savings allowance (PSA), available from April 6 which allows savers to earn £1,000 interest (for basic-rate taxpayers) or £500 (higher-rate) tax-free per year.  Under the PSA, returns on non-Isa savings within the tax-free limit look to be greater than the returns offered by ISAs, because rates paid are generally higher.

But is the Lifetime Isa just another version of the Help to Buy Isa it looks pretty much as though it is but it’s a slightly better version.  The contribution limit of £4,000 is higher than Help to Buy and it can be invested in shares as well as cash and here is no restrictive maximum bonus figure (£3,000 for the Help to Buy Isa). A bonus will be paid on contributions made up to the age of 50, although there will be a consultation for bonuses on contributions beyond that age.

If you have already opened a Help to Buy ISA you will be able to transfer the balance to a Lifetime ISA, according to the Treasury, you will receive the 25pc bonus on the full balance. As a vehicle to save for a first property, this looks like quite a good option.

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 

Budget: Tax situation

After George Osborne’s most recent budget the tax situation for individuals looks slightly improved with the threshold for 40% income tax payers to rise from £42,385 to £45,000 in April 2017. And the Tax-free personal allowance, to rise from £11,000 in April 2016 to £11,500 in April 2017. Even Capital Gains Tax is to be cut from 28% to 20% and from 18% to 10% for basic-rate taxpayers.

But the proposed hike in Insurance Premium Tax is proving controversial.  The insurance premium tax will rise from 9.5% to 10% and Chancellor George Osborne has been mulling plans to raise the Insurance Premium Tax from 9.5% to 12.5%. Many say this will simply penalise customers for insuring their valuables.

The Association of British Insurers has estimated the tax — levied every time someone buys an insurance policy in the UK — will add £13 to car insurance policies and £10 to building and contents insurance on average. Liverpool Victoria boss Mike Rogers said customers would bear the brunt of any increase and urged the Treasury not to raise the tax, which was hiked from 6% to 9.5% in November. “It will increase the financial burden for millions of responsible households,” Rogers said. “It is not a tax on insurance companies — it’s a tax on insurance products which is paid directly by customers, effectively penalising them for doing the right thing and protecting the things they value most.”

Enable’s experienced IFAs in Bishop’s Stortford can help you work out the best way to make sure your work and property are protected and help you plan cover for you family should anything happen to you.

Source: BBC/Standard

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  

Retiring with a buy-to-let

Helping people plan for retirement Enables’ experienced IFA’s have seen more and more retirees looking to invest their tax free pension cash lump sum into the buy-to-let property.  Despite the looming tax clampdown, this market has stayed fair constant according to data from Fidelity International.
 


From the 6th of April 2016, any buy-to-let investor will have to pay an extra 3% stamp duty surcharge more than other residential buyers. Higher-rate tax relief on mortgage interest is due to reduce from April 2017 to the basic 20% rate and landlords overall will have to claim less for wear and tear on their properties. Despite these impending changes retirees’ continue to look to bricks and mortar with 7% of Fidelity’s retirement customers using their tax free cash lump sum to invest in a rental property this January. In the latest budget Osborne also announced further Stamp Duty increases to large property investors, those with 15 properties or more. 


Investment director for personal Investing at Fidelity International, Maike Currie said: “for many retirees, buy-to-let is seen as a ‘no brainer’ investment given the spectacular rise in property markets, particularly in London, over recent years. But tax changes aside, the illiquidity of the housing market as well as costs in the way of maintenance, stamp duty, mortgage arrangement fees and a host of unpredictable outgoings can chip away at income. Not to mention the time and effort required to manage a property and the risk that it may lie empty between tenancies.”… “Buy-to-let in retirement may work for some but with the added extras that come with it, it’s worth asking yourself, whether you really want to be managing a property in your eighties?” Enable’s IFAs in Bishops Stortford can help talk through your retirement options.

Source: Landlord Today

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