Creating your own ‘mini- tax haven’

Enable’s independent Financial Advisors in Bishops Stortford know that making sure your wealth management is tax efficient is key to building up your portfolio.  It has been much in the news recently but there are other ways of creating your own little tax haven without breaking any rules or following the super-rich and hiding money offshore. There are now numerous ways to build long-term wealth in the UK without either falling foul of the taxman or incurring unwelcome tax charges.

One of the easiest ways to build tax-free for the long-term is by using an Individual Savings Account or Isa. Since April 6 you can invest a maximum £15,240 in an Isa for the tax year that started on. Any gains you make from investing will be tax-free and when you come to withdraw any proceeds, there will be no tax to pay. Couples can also double up, investing £30,480 between them in the current tax year while £4,080 per tax year can be invested on behalf of a child in a Junior Isa.

Isas are free of income tax; free of capital gains tax; small companies listed on AIM can be held as well as UK corporate giants; and since last year, Isas can be inherited on death, preserving their tax-free status.  By way of contrast, pensions have lost a lot of their lustre because of restrictions on the amount that can be invested (£10,000 per year in the case of some additional rate taxpayers) and the size of pension fund that can now be accumulated. For help deciding where to save Enable’s IFAs in Bishops Stortford can help.

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

Tougher lending rules for Buy-to-let

Enable’s IFA’s in Bishop Stortford have helped many set up or build a property portfolio as part of their wealth management. And although the rise in buy to let lending is slowing with the new stamp duty levy introduced on 1st April, the FPC think the sector is still not without potential threats in terms of financial stability.

As a result there will be stricter affordability checks for any new buy-to-let mortgages and landlords with four or more properties will be expected to declare the rental income they expect to receive from tenants and also their own income and spending habits. Landlords will also have to prove they can cope if interest rates rise sharply and can afford all the costs associated with renting out a property. This includes tax, which will rise on buy to let properties from next year.

 ‘The FPC welcomes and supports the Supervisory Statement issued by the Board of the Prudential Regulation Authority (PRA) to clarify its expectations for underwriting standards in this market, including guidelines for testing the affordability of interest payments.’

The Residential Landlords Association however, whilst agreeing that no landlord should take on debt that they cannot afford, is warning that the proposals are premature given the considerable tax changes being made to the sector which are likely to cool the market. RLA policy director David Smith said: “The Bank needs to be careful that it does not over-react to the current surge in buy-to-let applications which are aiming to beat the tax increases coming in April. These include a three percentage points extra levy on stamp duty and abolition of mortgage interest relief. It is likely that the impact of these will significantly reduce the demand for borrowing.

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 

Working longer

With the Queen turning 90 and still working it brought into relief for Enable’s IFA’s in Bishops Stortford what it might be like for all of us in the not too distant future. By coincidence the Office for National Statistics also published some new figures in the same week about the “very old”.

In 2014 there were more than 500,000 people aged 90 and over in the UK. Thirty years ago, 2% of the population was over 90. In 2014 it was 5%. This pattern is very much the same across the developed world and longevity is most marked in Japan, followed by Italy and France.

But these figures might capture only half the story if current 20-year-olds can expect to live until they are 105. If you are one of the twenty somethings who can expect to live until you are 100, when will you be able to retire? If you put away 10% of your earnings into a pension and expect to live on 50% of your final salary, the answer is that you will have to work into your early 80s.

Many have got used to the idea that European populations are greying, with the balance shifting between those of working age to those who have retired. But living so long requires a fundamental rethink of the way we organise our lives, our finances and how we order our societies. In the first instance it simply means that people are going to have to work longer – a lot longer, in fact. If you are happy to work longer all is well if you want to secure your pension there is not time like the present.

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

Interest rates held again

When the Bank of England’s nine-strong Monetary Policy Committee (MPC) met on 16 March, they unanimously voted to maintain the Bank Rate at 0.5%. Taking into consideration the likely persistence of economic headwinds, the MPC members agreed that when the Bank Rate does rise, it was expected to do so more gradually and to a lower level than in recent cycles.

The rate decision comes at a time when global growth concerns abound, typified by the OBR’s (Office for Budget Responsibility) downgrade of the UK growth forecast. In addition, uncertainty surrounding the EU referendum in June seemed to be one of the main drivers of the recent decline in sterling, which has depreciated by around 9% from its peak in mid-November 2015.

The Chief Economist at financial information firm Markit, Chris Williamson, was quoted as saying that the decision to retain the rate was “no surprise”, elaborating, “The Bank highlighted how uncertainty regarding the June vote on the UK’s membership of the EU is exacerbating wider concerns about the domestic and global economic outlook.

“Policymakers noted how spending by businesses and overall demand in the economy could weaken as a result of the intensifying Brexit fears, which would worsen an already shaky start to the year.”
At the same meeting the MPC also unanimously voted in favour of the proposition that The Bank of England should maintain the stock of purchased assets financed by the issuance of central bank reserves (‘quantitative easing’) at £375 billion.

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 unemployment rate maintains decade low

In March, the Office for National Statistics (ONS) reported that in the three-month period to January 2016 the number of people in the UK who were not in work but seeking and available to work, dropped to 1.68 million, down 28,000 from the previous quarter (Aug to Oct 2015).

 Maintaining a ten-year low in percentage terms, the rate of unemployment was stable at 5.1%. The figures showed that a total of 31.42 million people were in employment, which represents an increase of 116,000 on the previous quarter and an increase of 478,000 compared with one year earlier.

Regionally the North East of England had the highest unemployment rate (7.8%); the lowest rate was recorded in the East of England (3.6%). The EU’s statistical agency, Eurostat, reported that in January the Eurozone’s unemployment rate fell to 10.3%, its lowest rate since August 2011.

Across the pond, the US Labor Department reported in March that 242,000 jobs were added in February, far exceeding the prediction of 190,000. The unemployment rate in the US is at an eight-year low of 4.9%.

From a wage growth perspective, ONS data showed a 2.1% increase in average weekly earnings including bonuses for employees in Great Britain, in the year to January.

It has been reported that Scott Bowman, UK economist at Capital Economics, stated that the UK’s job recovery remained in “full swing” but cautioned that wage growth was “still fairly subdued by past standards, especially considering how much the labour market has tightened recently”.

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

MARKETS: (DATA COMPILED BY THE OUTSOURCED MARKETING DEPARTMENT)

Geopolitical issues continued to dominate global stock markets during March, causing uncertainty and rollercoaster volatility. Economic worries remained, albeit overshadowed by the long race for the White House, the European migrant crisis and terrorism in Brussels ahead of Britain’s June EU referendum. The global oversupply of steel and consequent low prices brought the UK steel industry crisis to a head as the month ended.

After starting the year badly, losing 500+ points to below 5,700, the FTSE100 was back above 6,000 by end-January, but further turmoil followed in February and it was briefly down around 5,500. Post-Budget and the Brussels attacks, it was above 6,000 again, hit a 2016 high on 30 March, and finally closed the month on 6,174.90, a rise of 1.3%. Seeing similar volatility, the wider FTSE 250 gained 1.9% at 16,926.12. The AIM rose 2.6% to 710.78 during March.

With Clinton and Trump emerging as presidential frontrunners, contrasting visions of US foreign policy spooked Wall Street at times despite positive economic indicators. January-February angst about when the Federal Reserve might repeat December’s interest rate rise also weakened equities, but March saw a strong recovery by the Dow Jones index. It closed at 17,685.09 for a one-month gain of 7.1%. The NASDAQ advanced 6.8% to 4,869.85.

Bourses in crisis-hit Europe also saw volatility; the Eurostoxx50 had declined almost 7% in January. Gyrations continued as events unfolded and the European Central Bank deposit rate was moved more deeply negative in early March over deflation worries. However, the Eurostoxx50 recovered 2.0% to 3,004.93 over the month. Tokyo equities also saw New Year falls but regained some lost ground in March as the Nikkei225 closed 4.6% higher than end-February, at 16,758.67.

Currency markets reflected diverse economic perspectives, the US dollar surrendering some early-2016 gains against sterling, losing about 3.6% to $1.44, and sterling weakening a further 0.8% against the euro to €1.26. Global supply and demand uncertainties continued to haunt the oil market, but Brent crude ended the month 10.1% to the good at $40.33. Nervousness created intermittent demand for gold, which ended virtually unchanged at $1,232.69.

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

OBR predicts slower growth rate

In Chancellor George Osborne’s 2016 Spring Budget, he reported on the forecast from the Office for Budget Responsibility (OBR) that the UK economy would grow more slowly over the next five years than expected last November.

The OBR’s Economic and Fiscal Outlook estimated GDP growth of 2% for this year, rather than 2.4%, based on lower future productivity. Furthermore, the report cut forecasts for annual economic growth for every year until 2020. The OBR offered reduced global demand among the reasons for the downgrades, as “since our November forecast, economic developments have disappointed and the outlook for the economy and the public finances looks materially weaker”.

Weighing heavily on the OBR’s press conference was the question of whether the UK would ever see productivity return to pre-financial crisis levels. OBR head Robert Chote cited extreme uncertainty around evaluating growth prospects; however, he highlighted the disappointing productivity growth of the last quarter of 2015, explaining that “we have placed more weight on that as a guide to future prospects”.

The report follows other forecasts from the Bank of England and OECD with lowered UK growth projections. Financial markets appear to be concluding from this doom and gloom that interest rates will not rise until the end of the decade, with a potential near-term cut.

Meanwhile, the chancellor claimed that he was on target to reach a budget surplus by 2019-20. In its budget policy paper, HM Treasury acknowledged weaker productivity growth but highlighted the OECD’s prediction that the UK would grow faster than any other G7 economy this year. It outlined plans for additional savings equivalent to 0.5% of total government spending, “to ensure the nation lives within its means”. Meanwhile, a host of further initiatives were introduced, designed to reduce the deficit and bring reforms which would ensure “Britain is fit for the future”.

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