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Record Number Of Over 50s In Work

Aviva have published figures showing that employees over 50 are on track to become the largest segment of the workforce by 2024.

A total of 9.67 million people over 50 are currently employed in the U.K., making up 31% of the workforce. The most recent figures show that this age group is rising at a record pace since 1992, when data began to be kept and when the over 50s made up just 21% of those employed.

Trend Set To Continue

Aviva believe that by 2018, the number will reach 10 million for the first time and account for 1 in 3 workers by 2024.

Alistair McQueen, savings and retirement manager at Aviva predicts that “over 50s will become the leading group of workers within the decade”.

Changing Attitudes Towards Planning For Retirement

As life expectancy and with it the cost of living post-retirement increases, pension-aged people must rely on both saving more of their earnings to put towards retirement and working longer to acquire more money.

Mr McQueen states, “for many, the best response will be a mix of the two. Auto-enrolment into workplace pensions encourages us to save more, and more than 6 million new pension savers have joined the system since it was introduced in 2012.”

Retirees Under 65 Becoming Increasingly Rare

Mr McQueen adds that “ the idea of ‘early retirement’ would be relegated to the dustbin of history if recent trends continued”. If the decline in early retirees were to be maintained at its current rate, it would take until 2029 for there to be no people aged between 16 and 64 classified as ‘retired’.

In 2011, a peak of 1.6 million 16-64 year old’s were classed as being retired. The number has since fallen to 1.2 million in 2016.

For help and advice please do not hesitate to contact us at Hoskin Financial or Hoskin Home Loans

THIS BLOG PROVIDES INFORMATION, IT IS NOT ADVICE. ANY OPINIONS ARE GIVEN IN GOOD FAITH AND MAY BE SUBJECT TO CHANGE WITHOUT NOTICE. OPINIONS AND INFORMATION INCLUDED WITHIN THIS EMAIL DO NOT CONSTITUTE ADVICE. (IF YOU REQUIRE PERSONAL ADVICE BASED ON YOUR CIRCUMSTANCES, PLEASE CONTACT US AT HOSKIN FINANCIAL

 

Aviva Claims To Be Insulated From ‘Brexit’ Impact

Aviva believes capital surplus built up in recent years proves their business should not be affected by ‘Brexit’.

The insurance company Aviva is publishing research and data to reassure a market in shock after the vote for the U.K to leave the E.U., which led to Aviva’s share price falling by around 130p.

Steps Taken To Strengthen The Company In Recent Years

Angharad Knill, executive at Macquarie, provider of financial, advisory, investment and funds management services, says that “we believe this (devaluation) reflects the Aviva balance sheet of three years ago rather than today, and that the insurer has taken action in line with Solvency II capital requirements for insurers. While we do not believe Aviva has a ‘fortress’ balance sheet, it does offer a compelling valuation and dividend yield.”

Capital Surplus

Aviva has tripled its capital surplus in the last 4 years. The company reports that currently, its Solvency II coverage ratio remains near the top of its working range of 150% to 180%. This means that its net income after tax is around 150% to 180% the value of its short and long term liabilities.

In 2015, Aviva amassed £2.7bn in cash generation. £0.4bn of this came from Friends Life, an internal part of Aviva, management actions and one-offs. Ms Knill expects “more management actions to come and expect more strong cash flow in 2016 as the Friends Life integration continues. Management are guiding to 5-10% of Solvency II capital generation in 2016.”

As of March 2016, Aviva published preliminary results reporting a Solvency II ratio of 180% and a surplus of £9.7bn. They therefore consider themselves among the strongest placed and most resilient of the U.K. insurers with a low sensitivity to market stress. They state that they are monitoring any technical implications and will adapt accordingly.

For help and advice moving forward please do not hesitate to contact us.

Paul Hoskin

@HoskinFinancial

THIS BLOG PROVIDES INFORMATION, IT IS NOT ADVICE. ANY OPINIONS ARE GIVEN IN GOOD FAITH AND MAY BE SUBJECT TO CHANGE WITHOUT NOTICE. OPINIONS AND INFORMATION INCLUDED WITHIN THIS EMAIL DO NOT CONSTITUTE ADVICE. (IF YOU REQUIRE PERSONAL ADVICE BASED ON YOUR CIRCUMSTANCES, PLEASE CONTACT US AT HOSKIN FINANCIAL

Uncertainty Ahead If The U.K. Votes To Leave The E.U.

On Thursday 23rd June, the U.K. will vote in a referendum to decide whether or not to remain in the European Union.

A pro-leave outcome would send shock-waves through the U.K. and internationally.

Political Change

David Cameron and George Osborne have tied themselves to the ‘remain’ campaign, should the public vote against them, their authorities will be severely weakened. Cameron could step aside immediately, in the midst of economic turmoil or stay and honour the decision of the people. The result will mean a shifting of power towards the ‘leave’ campaigners, notably Michael Gove and Boris Johnson.

Rival Pictures Of ‘Brexit’ Painted By Campaigners

Osborne claims the timescale for exiting is strict and that he will immediately activate article 50 of the Lisbon treaty, setting in motion a negotiation to be completed within two years. Vote Leave campaign director, Dominic Cumming says this is “mad and like putting a gun into your mouth and pulling the trigger”.

Pressure from the E.U. makes triggering article 50 highly likely by the autumn. One of its creators, former Liberal Democrat M.E.P. Andrew Duff claims “the clause puts most of the cards in the hands of those that stay in.”

The E.U.’s Reaction

An E.U. official stated that “it will be imperative to prevent the Brexit contagion gripping other countries”. This could see the major powers within the E.U. push to make sure seceders are seen to be the losers in negotiations. Leave campaigners believe however that over the summer the E.U. will come to consider the value the U.K. brings to the union.

So What Will Happen?

Huge issues such as the U.K.’s membership of the single market and the free movement of E.U. citizens will become bargaining chips between large institutions with the outcomes dependent on individuals fighting with their own agendas.

Until next time when we may know if we are in or out.

Paul Hoskin

@HoskinFinancial

THIS BLOG PROVIDES INFORMATION, IT IS NOT ADVICE. ANY OPINIONS ARE GIVEN IN GOOD FAITH AND MAY BE SUBJECT TO CHANGE WITHOUT NOTICE. OPINIONS AND INFORMATION INCLUDED WITHIN THIS EMAIL DO NOT CONSTITUTE ADVICE. (IF YOU REQUIRE PERSONAL ADVICE BASED ON YOUR CIRCUMSTANCES, PLEASE CONTACT US AT HOSKIN FINANCIAL

Further Crackdown expected from HMRC on high net worth tax

Pinsent Mason have reported that the HM Revenue & Customs recent crackdown on tax avoidance is likely to be extended with the government having caught half a billion pounds extra since they started the campaign.

According to a Freedom of information requested by the law firm, HRMC reported that they collected £494m worth of income tax between 2014 and 2015 through their investigations into tax avoidance schemes.

Paul Nobel, the Tax Director for Pinsent Mason had warned advisers and accountants to beware of this success.

“High-net worth individuals and other wealthy taxpayers are likely to face further scrutiny as a result – both here and abroad”

HMRC has stepped up their investigations since 2012 especially following the extensive media coverage of celebrities participating in such activities, targeting actors, musicians, sports starts and comedians.

In April 2014 the Counter Avoidance Sirectorate was created to crack down on the use and promotion of such avoidance schemes and HMRC has also published a list of arrangements which run contrary to its rules.

Tougher powers have be introduced to find and demand disputed tax. The accelerated payment notices, which have caused some controversy have been part of these, where upfront payment of the tax under question within 90 days when the use of an avoidance scheme is suspected.

HMRC continue to be given new powers and tools to help them crack down on these avoidance cases.

HMRC has seen a surge in returns from investigations into tax affairs of high net worth individuals. The past year has seen an income of £29 for every £1 spent on the investigation process. That is a 60 per cent increase from 2014’s investigations.

£414m has been collected from the high net worth unit, which covers 6,000 individuals who have a net worth of £20m or more in 2014/2015.

The Committee of Public Accounts has concluded in their reports that the HMRC however are not doing enough to tackle tax fraud. They believe that “only limited progress” has been made in reducing losses through the crime.

Tax avoidance and evasion has once again been in the spot light recently with the leak of the “Panama Papers”. With everyone from the Prime Minister to actress Emma Watson named in these papers. The Financial Conduct authority has sent information requests to 64 implicated firms so far, but refused to be drawn on its preliminary findings.

For help and advice please do not hesitate to contact us at Hoskin Financial or Hoskin Home Loans

THIS BLOG PROVIDES INFORMATION, IT IS NOT ADVICE. ANY OPINIONS ARE GIVEN IN GOOD FAITH AND MAY BE SUBJECT TO CHANGE WITHOUT NOTICE. OPINIONS AND INFORMATION INCLUDED WITHIN THIS EMAIL DO NOT CONSTITUTE ADVICE. (IF YOU REQUIRE PERSONAL ADVICE BASED ON YOUR CIRCUMSTANCES, PLEASE CONTACT US AT HOSKIN FINANCIAL

 

Who Wants To Be an ISA Millionaire?

ISA Millionaire

ISA Millionaire

Most of us will remember the hit TV show, Who wants to be a millionaire, while is was popular thousand of want to be millionaires would rush home to see if they could answer the questions.  Most of us have dreamed of becoming a millionaire and regularly tell everyone what we will be spending our lottery winnings on, however the odds of you winning a million are roughly a million to one so what would you say if we told you that the humble ISA could be your chance to reach that magic million.

Now don’t get us wrong this is not a get rich quick scheme, but if you are prepared to put away a few thousand every year and have the patience to watch it grow you are in with a great chance.

Can an ISA Really Make you a Millionaire?

The short answer is yes, by investing in stocks and share, by utilising your tax efficient friend, The individual savings account (ISA) allowance to the max. Not only is it possible, hundreds of savvy savers have already done it and with commitment and time you can join their ranks.

In 2015 Barclays stockbrokers reported that nearly 70 of its clients had achieved ISA millionaire status and there must be many more across their investment platforms. The truth is, none of them achieved ISA millionaire status over night because investing in stocks and shares rarely makes you a quick buck however as the saying goes “slowly slowly catchy monkey”. The downside is that you will need to invest a tidy sum each year. (There’s always a catch)

Credit where Credit is Due

The time it will take you to reach this financial milestone has been significantly reduced now that our Chancellor George Osbourne has expanded the ISA allowance. In the current tax year you will be able to invest up to £15,240 in a stocks and shares ISA, and pay no capital gains tax or income tax on your returns for the rest of your life. From next April things get even better because you will be able to invest a massive £20,000, which is a five-fold rise on Gordon Brown’s original Isa limit of £4,000.

This is definitely a slow burner, a recent report by Fidelity International highlighted it will take just over 24 years to become an ISA millionaire. This millionaire status assumes you continue to invest the maximum ISA allowance, increasing your contributions by 2% every year. It also assumes your savings will grow by 5% year on year, after charges. Your returns could grow faster of course or they may not reach this level, especially while interest rates are so low.

ISA to Grow Because Cash is to slow

If your dream is to hit the ISA million mark you will have to invest in a stocks and share ISA, although the risks are higher than the money in the bank savings plan, the rewards are potential much more lucrative. For example if you had invested £15,000 in the FTSE all share index in February 1996 you would now have the tidy sum of £51,866, compared to a mere £20,345 with the safer alternative. This equates to an extra £31,521, some would say, well worth the risk.

These figures also assume you reinvest all your dividends for future growth, which is of course the secret to long-term savings success. Without this reinvestment the FTSE 100 is still 11% below the 6,930 it hit on December 1999, but when you take into account reinvested dividends this swings to a 70% growth rate.

Back to ISA Reality

The figures shown above are achievable however not every ISA investor will become a millionaire, the majority of savers can not afford to invest £20,000 every year as life tend to throw up a few challenges but there is no harm in having a dream, after all investing £20,000 into an Isa is more likely than winning a million pounds on the lottery.

If you have any questions regarding savings and investments please visit our website where you can get free advice.

For help and advice please do not hesitate to contact us at Hoskin Financial or Hoskin Home Loans

THIS BLOG PROVIDES INFORMATION, IT IS NOT ADVICE. ANY OPINIONS ARE GIVEN IN GOOD FAITH AND MAY BE SUBJECT TO CHANGE WITHOUT NOTICE. OPINIONS AND INFORMATION INCLUDED WITHIN THIS EMAIL DO NOT CONSTITUTE ADVICE. (IF YOU REQUIRE PERSONAL ADVICE BASED ON YOUR CIRCUMSTANCES, PLEASE CONTACT US AT HOSKIN FINANCIAL

 

 

 

 

550 jobs to be lost as RBS plans to automate investment advice

550 jobs to go at RBS

550 jobs to go at RBS

RBS plans to restrict face-to-face advice to people with more than £250,000 to invest as it strives to reduce costs after losing £2bn, this is the eighth consecutive annual loss posted by the struggling bank.

A spokesperson for the bank said “these changes are being made as more and more of our customers prefer to bank with us using digital technology”.

As a result “ we are scaling back our face-to-face advisers and significantly investing in an online investing platform that enables us to help a new group of customers with as little as £500 to invest.

This will affect customers who are looking for advice on products such as life insurance, which will only be available by phone, resulting in around 250 job losses.

The bank blamed a reduction in the number of customers using their insurance services for the move to a telephone only service.

Another 220 jobs will go with the introduction of a new online investment platform, there will also be 250 jobs lost in the insurance services division as well as 80 administrative support staff.

There is some good news for the tax payer though as RBS is paying back £1.2bn to the Treasury to buy out a crucial part of its £45bn bailout in a step towards returning the bank to the private sector.

RBS is making the payment to end an agreement with the government, which stops the bank paying dividends to any shareholders before the treasury. This is being done despite the fact they are not ready to start issuing dividends to shareholders.

Controversially the bailed-out bank still handed out its top management team future bonuses in shares worth more than £17 million pounds despite falling £2 billion into the red.

At Hoskin financial Planning we still offer a free face-to-face consultation and although we use obviously computers, we believe that getting to know you is the most important part of what we do. If you would like some help or advice please call us on 01621 876030 or visit www.hoskinfinancialplanning.co.uk

For help and advice please do not hesitate to contact us at Hoskin Financial or Hoskin Home Loans

THIS BLOG PROVIDES INFORMATION, IT IS NOT ADVICE. ANY OPINIONS ARE GIVEN IN GOOD FAITH AND MAY BE SUBJECT TO CHANGE WITHOUT NOTICE. OPINIONS AND INFORMATION INCLUDED WITHIN THIS EMAIL DO NOT CONSTITUTE ADVICE. (IF YOU REQUIRE PERSONAL ADVICE BASED ON YOUR CIRCUMSTANCES, PLEASE CONTACT US AT HOSKIN FINANCIAL

 

 

Low paid workers to get up to £1,200
bonus with new Help to Save scheme

Low Earners could get uo to £1200

Low Earners could get uo to £1200

George Osborne confirmed, the previously announced Help to Save scheme would be available to low income savers within two years.

Mr Osborne said the government were committed to helping the poorest in our society benefit from saving, he said that the governments new scheme will mean millions of low paid savers across the country could receive a government bonus of up to £1,200 which would help them to build their savings.

It is calculated that around 3.5 million low paid workers on universal or working tax credits will be able to set up a monthly saving plan of up to £50 which would attract a bonus equivalent to 50% of what you have saved- a maximum of £600 after two years.  Savers can continue to use the scheme for another two years and benefit from another bonus of up to £600.

When you are on a low income saving is often the last thing on your mind, this was confirmed In a recent study where it was found that almost 50% of adults in the Uk had less than £500 in savings set aside for a rainy day.

The new scheme has been widely welcomed by debt charities and financial planners, although some have voiced reservations.

Mike O’Connor, chief executive of debt charity StepChange, welcomed the move, he said: “Our research shows that if every household in the UK had £1,000 in rainy day savings, 500,000 would be protected from falling into problem debt.”

However, Mr O’Connor added that they are concerned two years is too long to wait for a bonus, as “such a wait may see families overtaken by events”.

Mr O’Connor also said, that to build financial resilience, any savings scheme needs to form part of a “responsive safety net”, including more affordable credit and better protections for those in financial difficulty.

 

David Cameron also announced his government are increasing the national minimum wage for young workers. These changes will take effect in October and will see the rate increase by 25p per hour for 21-24 year olds, which means they will be earning £6.95 per hour. Anyone in the 18-20 year old group will see their hourly rate increase to  £5.55 per hour.

The rate will also increase by 13p to £4.00 an hour for the under-18s and apprentices will be given an extra 10p an hour taking them to £3.40.

The government previously announced that April will see the over 25s being paid a national living wage of £7.20 per hour.

Speaking about the above announcements, David Cameron said “I’ve made it the mission of this government to transform life chances across the country.

“That means giving hard working people the extra support they need to fulfil their potential.

If you are looking to set up a new savings plan or would like help in getting the most out of your existing savings, contact Hoskin Financial planning for a Free consultation on 01621 876030 or leave us your details here

For help and advice please do not hesitate to contact us at Hoskin Financial or Hoskin Home Loans

THIS BLOG PROVIDES INFORMATION, IT IS NOT ADVICE. ANY OPINIONS ARE GIVEN IN GOOD FAITH AND MAY BE SUBJECT TO CHANGE WITHOUT NOTICE. OPINIONS AND INFORMATION INCLUDED WITHIN THIS EMAIL DO NOT CONSTITUTE ADVICE. (IF YOU REQUIRE PERSONAL ADVICE BASED ON YOUR CIRCUMSTANCES, PLEASE CONTACT US AT HOSKIN FINANCIAL

 

 

Pensioners Let Down By Government “Shambles” Of Communication

Most people retiring after the 6th of April 2016 will not receive the full £155.65 a week flat rate state pension

If you are retiring after the 6th April 2016 your state pension will fall under a new regime touted as being simpler and fairer.  However,  a Work and Pensions Committee final report has found “failures to communicate mean too few people understand” the changes and many are set to receive less money than they expected. MPs have been critical that government communication has been too “focused on the full flat rate”.

In what Saga’s director of communications, Paul Green branded a “shambles”, those worst hit are unaware with “inaccurate or outdated” information leaving them “little to no time to make up for this government information error.”

With the changes looming, MPs have called for those negatively affected to be written to “as a matter of urgency”.

Women Amongst Those Most Negatively Affected By Changes

While it is still unclear whether the new rules will meet their stated goals in the long run, it is the transitional years that are set to see many people lose out.  Those groups at the top of the MPs’ concerns include:

  • People with fewer than 10 years of qualifying contributions.
  • People (largely women) who would currently derive rights to a pension based on their spouse’s contributions and are not covered by transitional protection.
  • Those who built up a large guaranteed minimum pension in the period 1978-1988 and will reach state pension age during the early years of the new regime.

MPs are calling for a new telephone hotline for those concerned about their circumstances to be manned by expert advisors and annual state pension statements to be sent to all people aged 50 and over in line with the private sector.

For clear independent financial advice please feel free to contact Hoskin Financial Planning to discuss how you are affected.

THIS BLOG PROVIDES INFORMATION, IT IS NOT ADVICE. ANY OPINIONS ARE GIVEN IN GOOD FAITH AND MAY BE SUBJECT TO CHANGE WITHOUT NOTICE. OPINIONS AND INFORMATION INCLUDED WITHIN THIS EMAIL DO NOT CONSTITUTE ADVICE. (IF YOU REQUIRE PERSONAL ADVICE BASED ON YOUR CIRCUMSTANCES, PLEASE CONTACT US AT HOSKIN FINANCIAL

 

CAN YOU HOLD YOUR NERVE?
WHILE DRAWDOWN FUNDS TAKE A DIVE?

Can You Hold Your Nerve.

Can You Hold Your Nerve.

The FTSE 100 has not fared to well over the past ten months, in fact since April 2016 it has fallen by 15%, which means any income linked to the performance of the FTSE will have been detrimentally affected.

The Income drawdown scheme which is a way of using your pension pot to provide you with a regular retirement income by investing it in funds specifically designed and managed for this purpose, have been hit badly as they rely on a strong market to deliver good results. Drawdown funds values have seen their values fall by 8%

It is estimated that in the six months following the pension reforms, more than 40,000 drawdown plans were purchased but rather than reaping the rewards of savvy saving many find themselves waiting for the markets and pension values to recover before they dare to take any income.

The good news is most customers who took a drawdown will have a portfolio containing a mixture of bonds; equities and cash, which are estimated, to have performed slightly better.

To put these figures into perspective, if you had invested £100,00 in a mixed portfolio of assets (assuming an income of £5,571 which was equal to the annuity rate at the time of taking the drawdown fund) your pot would have fallen by 13% in nine months to just over £86,000

For many people who now have a fund valued at 90% of what it was a few months ago will be left feeling very uneasy about the future. Although the markets have a history of recovering, remaining calm while your funds ebb away is easier said than done.

The effects of the fall may find people looking for other ways to pay their bills, some have called this drawdown prison, rightly not wanting to crystallise losses.

Some people will be able to hold on while things return to normal however if you need the income then looking at the alternatives is essential, as you may find the yield from your investments may not be enough. If you want peace of mind it is no longer the case of choosing an annuity or drawdown, you may need to consider a mixture of both products, of course as with all financial decisions you should seek professional advice before making any decisions.

If you would like any more information about your retirement options you can download our free report here or visit our website at http://www.hoskinfinancialplanning.co.uk/

This blog was inspired by ftadvisor

For help and advice please do not hesitate to contact us at Hoskin Financial or Hoskin Home Loans

THIS BLOG PROVIDES INFORMATION, IT IS NOT ADVICE. ANY OPINIONS ARE GIVEN IN GOOD FAITH AND MAY BE SUBJECT TO CHANGE WITHOUT NOTICE. OPINIONS AND INFORMATION INCLUDED WITHIN THIS EMAIL DO NOT CONSTITUTE ADVICE. (IF YOU REQUIRE PERSONAL ADVICE BASED ON YOUR CIRCUMSTANCES, PLEASE CONTACT US AT HOSKIN FINANCIAL

 

Grieving Families Could Face New death tax of £20,000

£20,000 Death Tax

£20,000 Death Tax

This new administration fee, which some are calling a back door death tax could see some bereaved families filling the government coffers with £20,000

According to ministers the new scheme would be better for poorer families whose estate was worth £50,000 or less as they would no longer have to pay the existing fee, which currently stands at £155 (up from £45 in 2014)

This will sound good to some, however as this new tax is designed to raise £250 million pounds, there will be many families who see a massive increase compared to what they pay now.

At the moment if you were to inherit a modest family home worth £290,000 the current charge would be £155 under new these new measure you would see that bill rise six fold to £1,000.

It doesn’t stop there as the fee rises sharply depending on the value of the estate. For example lets say you were inheriting an average London home with a value of just over 5000,000 your new bill will be £4,000 which quickly rises to £8,000 for estates worth 1,000,000. The cap of £20,000 would be payable for all estates valued at £2,000,000 or more.

This will be hard to swallow for many when you consider as we mentioned earlier that the existing fee is just £155 if acting through a solicitor.

It is expected these new fees will be unpopular however, Shailesh Vara, the justice Minister said, “this new fee would be a critical contribution to cutting the deficit as well as paying for an overhaul of the burdened courts system.

The consultation was cleverly launched while people’s attention was focussed on the negotiations in Brussels over Britain’s membership of the European Union.

In a letter to Bob Neil, chairman of the justice and select committee, Mr Vara, wrote, ”Court fees are never popular but they are necessary if we are as a nation, to live within our means”

“These proposals are progressive and will raise an additional £250 million pounds a year which is a major part of cutting the deficit and reducing the burden on the tax payer of running the courts and tribunals.”

In summing up, The ministry of Justice reiterated that only one per cent of estates would be liable for the top fee of £20,000 and nearly 60% of estates would pay no fee for probate at all.

The amount of families who will have to pay the top fee of 20,000 is expected to be around 2,700.

At the moment only estates valued up to £5,000 are exempt from the existing fee. That threshold will rise to 50,000 under the new proposals. The consultation process runs until April.

If you would like more information about inheritance tax or probate please contact us at Hoskin financial planning