All posts by admin

Women lose out financially due to lack of confidence, according to new report

Only one in three women describe themselves as very or extremely confident when it comes to their finances, according to a new survey by ISA provider Scottish Friendly.

Their latest Disposable Income Index (DII) has revealed that while nearly half of men were confident handling their financial affairs the number of women who felt the same was far lower.

As a result, it found that a far higher proportion of men (25 per cent) invest into stocks and shares ISAs than women (12 per cent), with men also more likely to be saving or investing for their retirement.

When asked by Scottish Friendly, a large proportion of female respondents said they were not investing in stocks and shares because they are afraid of losing money (20 per cent) and/or don’t fully understand them (18 per cent).

The report also shows that, for men, the most likely reason for not investing was because they were waiting until they earned more money (20 per cent), followed by a preference for the security of cash ISAs and bank/building society products (17 per cent).

The quarterly report, compiled by Scottish Friendly and leading think-tank the Social Market Foundation, also revealed that the median UK household disposable income after paying for absolute essentials was £1,105 each month.

Experts say the report suggests that there is too much focus only on unequal pay in the workplace when issues outside of employment mean that women save and invest less.

Link: Disposable Income Index (DII)

Thousands of parents and caregivers missing out on pension benefits

It has been estimated that as many as 100,000 pensioners and family members could be missing out on National Insurance Credits to top up their pension funds.

Information obtained from a freedom of information request submitted to HM Revenue & Customs (HMRC) shows that in the 12 months to September 2017, only 9,486 people applied for the benefit – just a small proportion of those eligible.

The credits, which are available for those who look after young children instead of working, can be worth up to £230 a year in retirement.

Any family member who is of working age and looks after a child under 12 may be eligible to make a claim for the credits, if the child’s main parent or caregiver is working.

“This National Insurance credit is a valuable right,” said Royal London policy director and former Pensions Minister Steve Webb, who made the FOI request.

“But we believe there are tens of thousands more grandparents who could be entitled to benefit, and we would encourage more of them to find out about the scheme and to make a claim.”

Link: National Insurance: credits for parents and carers

Parents missing out on important pension protection

Families across the UK could be missing out on millions of pounds of additional pension income as they fail to realise the connection between claiming child benefit and protecting their state pension record.

In the 1970s, the system of Home Responsibilities Protection was introduced, which was designed to treat women and men who were at home looking after children more favourably when their eventual state pension was provided to recognise the contribution they made at home.

By 2010 this system had evolved and a year at home with a child under 12 contributed nearly as much to a basic state pension as a year in paid work.

However, in January 2013 the Government introduced the High-Income Child Benefit Tax Charge, which saw a tax charge incurred if a parent receives child benefit, but is earning £50,000 per year or more.

This charge increases on a sliding scale until earnings pass £60,000, at which point the value of the child benefit is equal to the charge being levied.

Many high-income couples no longer bother to claim child benefit due to this, but as a result, they may be missing out on an integral pension protection.

It would seem that there is no point claiming for a credit only for it to be taxed, but the rules also allow partners to get credits towards their state pension, even if they don’t receive the child benefit.

To assist taxpayers the Government has even included the option to allow couples to defer the child benefit payment but accept the National Insurance credits.

There is a growing concern that many new mothers and fathers may not be aware of this and could, therefore, miss out on important National Insurance contributions.

Couples who have chosen to opt out of the child benefit system are therefore being reminded to check their current situation to ensure they maintain the state pension protection afforded to them.

Link: High Income Child Benefit Tax Charge

First-time buyer numbers hit a record ’11-year high’

The number of people taking their first step on to the property ladder hit an 11 year high in 2017, according to trade association, UK Finance.

Last year there were 365,000 first-time buyers in the UK – an increase of 7.4 per cent over the previous year and the highest number since 2006.

According to the Office for National Statistics (ONS), house prices rose by 5.2 per cent in 2017 and the average home in the UK costs £226,756, with values rising faster than inflation.

Despite increasing house prices, more first-time buyers made it onto the market thanks to a number of innovative schemes, such as shared ownership, Lifetime ISAs and Help to Buy, as well as help with deposits from family members.

Data from UK Finance also showed that the average first-time buyer had a household income of £41,000 or more and was aged 30.

In comparison, the number of second steppers or those moving to a new property dropped by three per cent. The average home mover was aged 39 and had an annual income of £55,000.

Looking ahead, Paul Smee, Head of Mortgages at UK Finance, said: “2017 saw the number of first-time buyers reach its highest level in a decade, which is welcome news for those getting started on the housing ladder.

“But although the market remains competitive there is no room for complacency, with weaker December figures consistent with our market forecast of subdued growth this year.

“We are also seeing a less buoyant buy-to-let market, which continues to be impacted by recent tax and regulatory changes. This will continue to flatten gross lending volumes this year.”

The study also found that the number of new buy-to-let mortgages dropped by 17 per cent year-on-year. It is thought that this is a response to the changes to property tax, in particular, the restrictions on mortgage interest relief.

Link: UK Finance Study

The number of millionaire households is on the rise in the UK

The Office for National Statistics (ONS) has released a new report that shows that the number of UK households that could consider themselves as millionaires rose by nearly a third in just two years.

Around 3.6 million households in Britain had wealth in excess of £1million, according to the latest data (collected in 2016). This was up 29 per cent on the figures collected two years before.

In its study, the ONS took into consideration pension savings, investments, assets, and property values, less any outstanding mortgage.

When looking further down the income scale the ONS found that median wealth per British household, after borrowing is taken into account, was £259,400 by July 2016 – an increase of 15 per cent on the figures from 2014.

The ONS found that the wealth of those at the top end of the scale had risen as a result of growing private pensions and property values.

The data showed a 20 per cent rise in pension wealth by July 2016, with the UK total rising to £5.3 trillion.

Meanwhile, property wealth grew by 17 per cent to £4.6 trillion over the same two year period.

Median household total wealth was lowest in the North East of England at £163,000, but highest in the South East of England at £381,000 by June 2016.

Link: Wealth in Great Britain

One of the region’s only firms of Chartered Financial Planners celebrates latest qualification

MT Financial Management, holders of the prestigious Chartered Financial Planner status, has congratulated Daniel Elkington on achieving qualification success.

Looking to further progress his career, Daniel Elkington joined the practice at the end of 2017, with aspirations of practising at the highest level, within a leading firm of financial planning experts.

After months of hard work and dedication he has managed to complete the qualification, which marks him out as a leading expert in the profession as he is not only Chartered, but a fellow of the Personal Finance Society (PFS) in addition.

Prior to joining the firm, Daniel built up almost a decade’s worth of experience in the world of finance, which led to him becoming a runner-up at the Money Management Financial Planner Awards 2017 for his expertise in alternative assets.

He specialises in advising high net-worth clients, trustees, charities and businesses on a range of wealth management matters, such as pension planning, Enterprise Investment Schemes, alternative investments and much more.

Talking about his latest accreditation, Daniel said: “Achieving fellowship and chartered status marks me out, alongside the rest of the team at MT Financial Management, as an expert in a wide range of financial planning matters. This difficult accreditation took years of studying and requires planners to be able to clearly demonstrate the practical skills that they have gained during their career.

Only a limited number of people complete this qualification each year and I feel truly honoured to have obtained this status.”

Recognised across the financial services industry as the gold standard accreditation, MT Financial Management’s position as one of the few chartered financial advice firms in the East of England has made their advice very sought after.

As specialists in estate planning, trusts, inheritance tax, investments, pensions and protections, such as life and health insurance, MT Financial Management’s team of chartered planners works with many individuals to create tailored lifelong wealth plans.

Trevor Wilshire, Director of MT Financial Management, which has held chartered status since June 2007, said: “Being a financial adviser is one of the most trusted positions you can hold. In many cases we are advising people on their life savings and retirement plans, so the advice must be tailored to each client’s needs and aspirations.

“Our firm’s status as Chartered Financial Planners and Dan’s latest accreditation allows us to demonstrate to clients that they are in the right hands from the outset of our relationship.”

UK private housing stock worth £6 trillion

For the first time ever, UK private housing stock has surpassed the £6 trillion value mark, according to the latest research from the Halifax.

The Halifax report has shown that in 2017 the value of privately-owned homes has grown by £376 billion to reach £6.015 trillion – meaning that the average residential property value is now £256,912, up 37 per cent from 2007 (£187,310).

“The value of housing stock has grown by close to £2 trillion in the past decade and with the equity-rich regions of London and the South East largely responsible, it highlights a considerable regional imbalance in the distribution of housing wealth,” Russell Galley, managing director at Halifax, said.

“Within the capital, there is also a mix of fortunes. While more than a fifth of total property wealth is in London, lower levels of owner occupation reflect a major barrier to the property ladder with a far greater number of people renting where house prices are at their highest.”

The study by the bank also showed that around 40 per cent of UK property wealth belongs to households aged over 65. Amongst this age group, around 61 per cent of homeowners were completely mortgage-free.

By comparison, around 47 per cent of people aged 25 to 44 have a mortgage and account for 15.4 per cent of total housing wealth.

Those aged 24 and below now account for just 0.1 per cent of net housing wealth in the UK – showing a vast disparity between older generations and younger people trying to get a foot on to the property ladder.

LINK: UK private housing stock worth £6 trillion

Only half of employees are happy with rise in Workplace Pension contributions

A new study by Aviva has found that only 50 per cent of the 2,007 people it surveyed would definitely stay ‘opted in’ to a workplace pension scheme following a rise in minimum contributions.

From April 2018, minimum pension contributions will rise from the current two per cent (typically one per cent from the employer and one per cent from the employee) to five per cent (three per cent from the employee, two per cent from the employer), followed in April 2019 by another increase to eight per cent (five per cent from the employee, three per cent from the employer).

In light of this rise in contributions, roughly a third of employees (34 per cent) said they were unclear on what they would do, while 12 per cent said they were considering leaving the scheme.

Only one in 25 (four per cent) said they would opt out of their workplace pension altogether, showing a growing demand amongst workers to save for their retirement.

More than 8.5 million employees have signed up for a workplace pension since they were introduced, with workers saving £87.1 billion into schemes in 2016, according to the Department for Work & Pensions.

If the data is combined and extrapolated, it suggests that more than 340,000 people could leave their workplace pension scheme when contributions rise in April 2018.

Despite this, Aviva is calling on the Government to consider raising the minimum contributions to 12.5 per cent within the next decade, with Colin Williams, its Workplace Managing Director saying the five per cent increase due next year was “well short of the level” the firm believed is necessary.

LINK: Pension Contributions Rise

Highly talented financial specialist joins MT Financial Management

Dan_Elkington_profileOne of the East of England’s leading wealth management firms MT Financial Management (MTFM) has welcomed Daniel Elkington as its latest Independent Financial Planner (IFP).

Daniel has almost a decade’s worth of experience in the world of finance and was a runner-up at this year’s prestigious Money Management Financial Planner Awards for his expertise in alternative assets.

Put together by Money Management, which is the technical journal of The Financial Times for advisers, the award attracted the attention of MTFM who thought Daniel would be the ideal candidate for their latest IFP position.

He specialises in advising high net-worth clients, trustees, charities and businesses on a range of wealth management matters, such as pension planning, Enterprise Investment Schemes, alternative investments and much more.

Daniel can also provide support to clients with their wider investment portfolios and assist with the decision whether to transfer final salary pension and CARE schemes.

Speaking about his appointment, he said: “I have had a fantastic 2017, coming close to taking home a national award. Joining MTFM is another highlight and I am looking forward to providing a complete service, and being able to use all the qualifications and expertise that I have to the full benefit of my clients.”

Outside of work, Daniel is very active in the local community and sits as a trustee of a local multi-academy trust school – looking after 250 teachers and thousands of pupils across a range of sites.

He is also a trustee of Boston and South Holland Age UK and President of the Boston Grammar School Alumni.

Trevor Wilshire, Director of MT Financial Management, said: “When we met Daniel and heard about his exceptional achievements we knew he would be an asset to our firm. We believe that his expertise and experience gained in a professional environment will strengthen our reputation for delivering excellent support to clients of our firm.”

Government’s coffers set to increase as a result of Inheritance Tax

Latest figures suggest that an additional £900million in Inheritance Tax (IHT) will be collected by the Government between now and 2022.

Documents which were released as part of the recent Autumn Budget revealed that the Treasury expects to receive a larger than expected amount from IHT over the next five years.

Back in March, the Office for Budget Responsibility (OBR) estimated that around £32.4billion would be received by the Treasury coffers during this time period.

But the forecast has now been adjusted upwards, with analysts expecting that IHT payments will now increase by almost £1billion.

The OBR has said that the adjustment takes account of the fact the increasing number of people who die each year, coupled with the fact that property prices are rising, which has led to an increase in the number of individuals falling within the IHT bracket.

It is believed that more rigorous enforcement by HM Revenue & Customs’ (HMRC) team of tax investigators has also had an impact on the figures.

Previous statistics revealed that IHT receipts rose to £4.8 billion in the 2016/17 financial year and it is widely expected that this figure will edge over the £5 billion mark within the next 12 months.

The rules surrounding Inheritance Tax are complex and confusing, so it is important to seek specialist IHT planning advice to suit your specific circumstances, sooner rather than later, and thus ensure you do not hand over to the taxman more than is necessary.

To find out how the experts at Moore Thompson can help you, please contact us.