Email Newsletter by Debbie Day at Hoskin Financial Planning on 23rd July 2015.

Cost of getting divorced set to jump by a third to £550 as Ministry of Justice announces court fee increases

•Cost of issuing divorce proceedings to jump by £140 to £550
•General applications in civil proceedings which are set to double to £100
•One week after announcement that dozens of courts face closure

The cost of getting divorced is set to jump by £140 to £550 under Government plans to increase court fees, which will come into force later this year.

Ministers had considered raising the cost of issuing divorce proceedings by as much as 80 per cent to £750, but trimmed it back after ‘carefully considering’ concerns.

The increase in divorce costs is just one of a number of price hikes announced by the Ministry of Justice, and follows last week’s announcement that dozens of courts are facing closure as part of a major shake-up of the system.

Other increases include fees for general applications in civil proceedings which are set to double to £100, and fees for issuing a possession claim, used to evict tenants, which will rise £75 from £280 to £355.

Courts minister Shailesh Vara also announced fresh consultation on new proposals. These include raising the maximum fee for money claims from £10,000 to at least £20,000.

At the moment, fees are payable on 5 per cent of the value of a claim up to a maximum fee of £10,000. Mr Vara said the change will only affected cases worth £200,000 or more.

Kind regards Debbie Day at Hoskin Financial Planning

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Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 23rd July 2015.

PHI: Covering your income

Income protection is an insurance policy that provides you with an income if you are unable to work as a result of accident or illness.

Most policies will then pay a regular monthly amount until you have made a full recovery, until retirement age, for a fixed term – or death if earlier.

Income protection can be useful as a supplement to state benefits, as these generally prove insufficient to maintain the lifestyle you are able to enjoy on your current earnings. It is traditionally used to cover your salary and the maximum amount you can insure for will enable you to broadly match the after-tax earnings you would otherwise lose.

Costs vary depending on your circumstances, your medical history, the time for which you defer payments but also on the provider. The more you are covered for, the higher the premium. However, cheaper is not necessarily better and therefore, as with all forms of insurance and protection, it is imperative you read the small print on your income protection policy to ensure you know what is covered.

Finally, it is also essential that you are open about any previous medical conditions, regardless of whether or not you think they are significant. Non-disclosure remains one of the most common reasons for claims being declined by providers and will probably only arise right at the moment you most need the money.

Financial advice is therefore highly recommended to help ensure you find the plan most suitable for you.

For further help and advice contact us @HoskinFinancial

Regards Paul Hoskin

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Email Newsletter by Debbie Day at Hoskin Financial Planning on 7th July 2015.

Three years after Britain’s mortgage lenders effectively shut their doors to people wanting to avoid paying back the capital on their loans each month, interest-only mortgages are making a comeback.

The deals, which allow people to keep their mortgage repayments down as only the interest and not the capital is repaid each month, became popular in the early 2000s as they were increasingly taken up by people struggling with affordability.

By 2007 a third of mortgages being taken out were interest-only, according to statistics from lenders, and the vast majority of borrowers had no repayment plan for the outstanding capital, but were instead relying on an increase in their property value to repay the loan. By the end of 2012, after tightening their mortgage rules, most lenders had either stopped lending on an interest-only basis or had severely restricted this type of loan.

Now, Barclays has become the latest lender to loosen the criteria on its interest-only deals for people who intend to use the capital from the sale of their home to repay the loan. It follows a similar relaxation of criteria by Leeds building society and, before it, Santander.

Barclays will now lend on an interest-only basis up to a maximum loan-to-value (LTV) of 75% in cases where the sale of property is being used as the repayment vehicle . Previously this was limited to 50% LTV. The caveats are that the extra 25% worth of loan will have to be repaid as capital and interest, and only applicants with a sole income of £75,000 or joint income of £100,000 or above will be considered.

Leeds and Santander will also lend interest-only up to 75% LTV, on the same part-interest-only, part-repayment basis. Neither lender has a minimum income requirement, but Santander says applicants must have at least £150,000 of equity in their property.

Since it increased the LTV on its interest-only mortgages, Leeds says about 80% of the people taking out the loans have done so as a remortgage. “This is broadly in line with what we would have anticipated,” spokesman Martin Richardson says. “It is a useful middle way for a borrower who has an interest -only mortgage but hasn’t made progress in paying down the capital, as they can start to reduce this without the payment shock of switching to a full repayment mortgage.”

It is understood that RBS/NatWest is also planning to resume offering interest-only mortgages in the next few months after pulling out of the market in 2012. It is likely to introduce similar caveats as its rivals.

Some other lenders, particularly the smaller building societies, will consider offering interest-only deals on a case-by-case basis while others, such as the Yorkshire building society, have pulled out of the interest-only lending market altogether.

For more help and advice please do not hesitate to give me a call.

Kind regards Debbie Day

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Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 4th June 2015.

Seek independent advice

Securing your financial future is now more important than ever. We are continually being told about the pressures on state benefits, particularly pensions, as the welfare state has to adapt to an expanding and ageing population.

As a result, more responsibility is being placed on us, as individuals, to make the most of our own savings and investments and prepare for our own futures.

At the same time, however, making these decisions is becoming ever more complicated. There are hundreds of providers offering thousands of products, all with different benefits for different needs at different prices.

As independent financial advisers, we look at the whole market to find out who is offering what products and how the different options can meet different individual circumstances. We are registered with the Financial Conduct Authority who monitor the way in which we give advice and, being independent, we are not limited to just one or small handful of providers.

We can seek out the most suitable products to match your particular circumstances and thereby help you meet your goals.

Kind regards Paul Hoskin IFA @ Hoskin Financial Planning

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Debbie Day at Hoskin Financial Planning on 2nd June 2015.

Savers get a boost as maximum Premium Bonds holding is raised to £50k

Savers looking to increase their punt on Premium Bonds can now put £50,000 into the product after National Savings and Investments raised the maximum holding yesterday.

Savers casting around for a home for their cash amid rock-bottom interest rates on savings accounts have been tempted by Premium Bonds in recent years, with the total amount invested rising from £19.7billion in 2003 to more than £53billion. But they were limited until today to a £40,000 maximum deposit.

Premium bonds offer an average return of 1.35 per cent, compared to a top rate of 1.5 per cent (before tax) on easy-access accounts and 1.9 per cent on the top one-year fixed rate – again, before tax.
But winnings are tax-free and holders are attracted by the chance of winning two monthly jackpots of £1millio and lots of other large cash prizes. On the flipside, there is no guarantee your holdings will win a prize at all during the course of the year, in which case your deposit will have lost value by the rate of inflation.

For the first time, families will also be able to buy Premium Bonds for their children directly online or by phone today. In the past, these could only be purchased by post or at a Post Office branch.

Yesterday’s changes follow last year’s announcement in the Chancellor’s Budget that National Savings and Investments would boost the Premium Bonds Investment limit.

A year ago, the Premium Bond limit was increased from £30,000 to £40,000, with a second £1million prize winner also being introduced from August 2014.

The total investment value has increased by £6billion since last June and NS&I expects the total amount will increase again following the increased holding limit from today.

Jane Platt of NS&I said: ‘Last year, we saw a huge level of interest when we raised the limit from £30,000 to £40,000 – and this latest increase to £50,000 is further good news for customers who want to save more and to give themselves extra chances to win a tax-free prize.’

Thanks Debbie Day IFA.

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Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 20th May 2015.

Life assurance

Most of us recognise the need to protect our dependents and understand how life assurance can help. The most common reason for investing in life cover will be to protect against the financial burden of mortgage payments but it is also part of the review we undertake perhaps after getting married or, more likely, when we have children.

For a single person with no dependents, life assurance may not be necessary. However, if you have debts and no savings, then a small amount might be necessary to pay expenses and prevent someone else being landed with that problem after you’ve gone. There is also an argument that you should cover a mortgage but in this case, if you are happy to pass the property back to the bank, or if your beneficiaries are more than able to cover the mortgage payments while a house is being sold, then you may not feel the need.

If you have dependents, however, you need to look at the consequences for them if your income were removed suddenly. How much do you earn? Do you have debts? How much is your mortgage or rent? Do you pay school or university fees? How long before your children will be working? Does your partner work? Could they continue to work without your support?

Even for those people who don’t work, there can be a considerable cost involved in getting help with children or around the house if the partner needs to keep working and that support is removed.

Life assurance may be a small price to pay to put your mind at rest.

For help and advice please do not hesitate to contact us @ Hoskin Financial Planning.

Paul.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Debbie Day at Hoskin Financial Planning on 19th May 2015.

UK inflation expected to turn negative for first time since 1960 as drop in oil and food prices benefits consumers

UK inflation is expected to have turned negative for the first time in 55 years last month, with the Office for National Statistics preparing to publish the latest official figures later today.

Last week, in its quarterly inflation report, the Bank of England said it expected the consumer price index to drop below zero before picking up ‘notably’ towards the end of the year as the impact of oil and food prices fade.

Bank of England predictions suggest the CPI measure of inflation fell to minus 0.1 per cent in April, but some economists expect it will remain at zero for the third month in a row.

UK CPI is currently at its lowest level since records started in 1989. According to an experimental data series, it was last negative in March 1960, when Harold Macmillan was Britain’s prime minister and Dwight Eisenhower was president of the United States.

March’s figures revealed that, when calculated to two decimal places, inflation was minus 0.01 per cent.
April’s likely dip into negative cost of living terrain is expected to have been driven by low oil prices and price cutting competition between the supermarkets.

With inflation below the Bank of England’s 2 per cent target, governor Mark Carney will again have to write to Chancellor George Osborne explaining why it is so low.

In his last letter to Osborne, Carney said he expected to write similar letters in the coming months.

But, Carney also stressed that a temporary period of falling prices ought not to be mistaken for a damaging spiral of ‘deflation’ – a prospect which might have unwelcome consequences such as households and businesses putting off spending and investment.

In its quarterly inflation report last week, the Bank of England cut its 2015 growth forecast to 2.5 per cent from 2.9 per cent, and for next year to 2.6 per cent from 2.9 per cent.
Samuel Tombs of consultancy Capital Economics said: ‘Deflation is likely to be for one month only.

‘The recent rebound in oil prices and stability of global food prices indicates that the negative contribution to inflation from energy and food prices will fade over the coming months.’

For more help and advice please do not hesitate to contact me.

Thanks Debbie Day

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Email Newsletter by Debbie Day at Hoskin Financial Planning on 5th May 2015.

HSBC kicks off rate war with first sub-2% five-year fix
HSBC may have started a new price war after announcing the market’s first five-year fixed rate deal priced below 2 per cent earlier yesterday.

The mortgage is available at 60 per cent loan-to-value and has a booking fee of £1,499. Charlotte Nelson, spokesperson for Moneyfacts, confirmed that at a rate of 1.99 per cent, it is the lowest on record.

Andrew Montlake, director at Coreco Mortgage Brokers, called it a ‘watershed’ moment and added that there are a whole host of borrowers set to be disappointed again as they will be unable to meet some of the lending criteria HSBC require.
“Whether we see other lenders follow suit remains to seen, as although inflation figures are at zero and Swap rates have fallen again recently, lenders seem to be getting close to the point where further price reductions would no longer be cost effective.”

He noted that low rates alone will not be enough for lenders to meet their targets this year, as they are all targeting the same pool of borrowers.

“Because of the need to provide a 40 per cent deposit, this mortgage deal is more likely to appeal to those with plenty of money to spare, in particular retirees who have taken advantage of their new-found pension freedom and who want to use this to invest in property,” he noted.

“With interest rates remaining low and house prices outstripping wage growth, the launch of the HSBC mortgage, in the short-term at least, is unlikely to tip the balance for home ownership.

For more help and advice on Mortgage Rates please contact Clare Allen at Hoskin Mortgages

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Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 18th March 2015.

Make the most of your ISA allowance

An Individual Savings Account (ISA) provides a rare opportunity to shelter your money from the taxman. For every pound you put in, you pay no tax on any capital gains or income earned – indeed you do not even have to declare your ISA’s existence to the taxman.

A new phase for ISAs
ISAs entered a new phase from 1 July 2014, when the ‘New ISA’ limit was increased to £15,000. You can invest as much as you like of this allowance in cash, stocks and shares, or a combination of the two. You are also free to transfer ISA savings from previous years between stocks and shares and cash.

Thousands of options
There are also thousands of different investment options available for your ISA – from cash and bonds through to property, equities and even overseas companies – so you can be confident that, whatever your financial aims and objectives, there is a suitable home for your money. As professional financial advisers, it is our job to make sure you get that right.

Use it or lose it:

The quicker you act, the earlier you can start to receive the benefits but do bear in mind that with an ISA, ‘once it’s gone, it’s gone’ – at the end of each tax year, you lose any unused ISA allowance.

For more advice please contact us @HoskinFinancial

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Debbie Day at Hoskin Financial Planning on 17th March 2015.

A million savers urged to register now to pay no tax on savings interest under new rules

A million savers need to register to pay no tax on their savings interest when changes to the tax system come in next month.
The rule where you pay 10 per cent on your first £2,880 of savings interest – as long as your total income is below a certain level – will disappear in the new tax year.

It will be replaced by a zero-tax band on the first £5,000 of savings interest. If your income, including that from savings, is less than £15,600 a year, you are eligible to register as a non-taxpayer.

To work out whether you are eligible you need to add up your total taxable income – including pensions, benefits, and any income from stock market investments – but don’t add in your interest from your savings accounts.
If this comes to less than £10,600, and your savings interest is less than £5,000, you can register as a non-taxpayer.

To register, fill in an R85 form for each taxable account, available from banks and building societies.

You can check whether you are eligible to register as a non-taxpayer with an HMRC tool here.
.
How the Government says this will work

From 6 April, one million savers with an annual income under £15,600 will be able to get their savings interest paid completely tax-free. An additional 500,000 savers could also get back some of the tax they’ve paid on their savings interest – if their non-savings income is less than £15,600.

If eligible for tax-free savings, savers will need to register their account with their bank or building society. If eligible to reclaim tax they have paid on interest, savers should complete form R40 or include the figure on their tax return.

For more advice please contact us @HoskinFinancial

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Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 4th February 2015.

2014/15 limits for ISAs

Allowances for Individual Savings Accounts (ISAs) have continued to rise during the current tax year, providing a welcome additional incentive not only for existing investors, but also for those who might be new to tax-free saving.

ISAs are tax-efficient vehicles that allow individuals to save and invest without having to pay income tax or capital gains tax, and they can be a good way for people to start saving or to add to their existing portfolio of savings and investments.

The introduction of the ‘New ISA’ (NISA) from 1 July 2014 increased the allowance for the tax year 2014/15 from £11,880 to £15,000, and also established substantial reforms to the system that provide greater flexibility and more choice for ISA investors. Under the new ISA rules, investors can allocate their entire £15,000 allowance across cash, stocks and shares, or any combination of the two. Moreover, investors can transfer their ISAs between providers as often as they like (subject to their providers’ rules).

If you cannot afford to take advantage of the full annual allowance, it is still worth saving what you can via a regular savings plan, which can start from £50 a month.

Do not forget one of the golden rules of ISA investing – if you do not use it, you lose it – so make the most of each year’s allowance.

Please note that levels and bases of, and reliefs from, taxation are subject to change.

For more advice please contact us @HoskinFinancial

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Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 18th February 2015.

Budget update

Ahead of next year’s General Election, Chancellor of the Exchequer George Osborne delivered a Budget that provided considerable food for thought. The UK economy is now predicted to grow more strongly than previously forecast and to expand this year to a level greater than its pre-crisis peak. The UK’s budget deficit during 2014 is likely to be lower than envisaged at 6.6% and is now expected to achieve a surplus by 2018/19.

Business rate discounts and enhanced capital allowances in enterprise zones were extended for another three years. The Annual Investment Allowance was extended to the end of 2015 and doubled to £500,000. Export finance was doubled to £3bn and interest rates on this lending were slashed by one-third.

From 1 July, cash ISAs and stocks & shares ISAs will be merged into a single ISA with an annual tax-free allowance of £15,000. The Chancellor also announced a new Pensioner Bond that will be available to everyone aged over 65 from January 2015.

Meanwhile, in what was probably the most controversial measure within the Budget, the Chancellor announced plans aimed at removing all tax restrictions on pensioners’ access to their pension pots. In particular, pensioners will no longer be obliged to purchase an annuity to fund their retirement.

For more help and advice please contact us on 01621 876030

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 4th February 2015.

Lack of pension savings by the self-employed

A record 4.5 million UK workers are now self-employed, 43% of who are aged 50 or over.

And, figures from the Office for Budget Responsibility show that self-employed people are more likely to be low earners with 35% earning less than £10,000 a year compared with 21% in 2008.

According to research carried out by Prudential, if you are self-employed you could be missing out on up to £91,512 over your working life because you do not receive employer contributions through a company pension scheme.

Interestingly, it found that almost a third (29%) of you expected to be reliant on the basic state pension when they retired. However, those retiring between now and April 2016 are not eligible for the additional state pension so you will have very little pension provision unless you’ve taken measures to put a pension plan in place.

After April 2016 you will be entitled to the new state pension which can, in certain circumstances, be more generous than the current system – but will usually still be not enough to cover costs in retirement.

Further, while government reforms in the form of ‘auto-enrolment’ will benefit thousands of workers in future, this doesn’t extend to the self-employed – you will have to make your own arrangements for pension provision.

If you are self-employed, make sure that you will not have to retire relying on the state pension.

And you do get tax relief on your contributions as an incentive to save for your retirement – if you want more information or to check that your current arrangements will provide a decent pension, just let me know.

Kind regards, Paul Hoskin.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 22nd January 2015.

Stamp duty reform

The process of buying a house has undergone an overhaul with the wholesale reform of the stamp duty system.

Before the changes implemented in the 2014 Autumn Statement, stamp duty was paid at a single rate on the entire price of the property. However, the coalition government has now scrapped this ‘slab’ structure and introduced a new tiered system, similar to income tax, in which higher rates of duty are charged in incremental steps.

No stamp duty will be paid on the first £125,000 of a property’s cost; 2% will be payable on the amount between £125,001 and £250,000. 5% will be payable on the amount between £250,001 and £925,000, and 10% will be charged on the amount between £925,001 and £1.5m. Anything above £1.5m will incur stamp duty of 12%.

As a result, 98% of house-buyers will pay a lower rate of stamp duty than before, and only those buying properties valued at more than £937,000 will pay more. Under the old system, for example, a house costing £275,000 would incur stamp duty of £8,250 – however, under the new rules, the buyer will pay stamp duty of only £3,750, saving £4,500.

Looking ahead, Halifax expects house prices to increase by between 3% and 5% in 2015. This slowdown in growth will be exacerbated by expectations of higher interest rates in 2015 and political uncertainty surrounding the General Election. .

Nevertheless, the bank believes economic expansion should provide support for housing demand, bolstered by stronger growth in real earnings.

For help and advice contact Clare Allen at Hoskin Mortgages or give me a call direct at Hoskin Financial Planning.

Kind regards, Paul Hoskin.

THIS BLOG/EMAIL NEWSLETER 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)

 

Email Newsletter by Debbie Day at Hoskin Financial Planning on 20th January 2015.

The biggest opening sales of any retail financial product in Britain’s modern history but when will pensioner bonds run out?

If current take-up of £576.5m per day continues, top savings will be gone by end of January

• Osborne says pensioner bonds will be available for months
• If sales continue at current pace bonds will be gone by end of January
• Sales figures are yet to factor in postal applications

If pensioner bonds continue to prove as popular as they have been in the first two days of launch, they would be sold out as February begins, number crunching shows.

On Thursday and Friday last week, the pensioner bond – officially known as the 65+ Guaranteed Growth Bond, offering best buy one year and three year fixed-rates – saw £1.153billion pour in via National Savings and Investments as starved savers snapped them up.

With a maximum of £10billion allocated, if sales carried on at the rate of £576.5million per day, the bonds would sell out just 17 days after launch, on Sunday 1 February 2015. And the figures quoted by NS&I do not yet include postal applications.
Despite the frenzy which saw phone lines jammed last week and transactions struggling to go through,
Chancellor George Osborne has hailed the bonds a success.

He also believes the bonds will be on sale for months. He said: ‘I can confirm that the latest figures show that our 65+ Pensioner Bond has had the biggest opening sales of any retail financial product in Britain’s modern history.
‘There’s plenty more available as we’re offering up to £10billion for sale, so we expect them to be on sale for months. It just shows what an appetite there is for an economic plan that rewards savers.’

As a result of the boom in demand, NS&I has had to take on 100 extra staff to man its call centre.

‘However, with more than 10 per cent of the allocation snapped up in the first two days, they may be totally sold out within five to six weeks.

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

 

Kind regards, Debbie Day @DebDayIFA

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Paul Hoskin and Debbie Day at Hoskin Financial Planning in January 6th 2015.

Making Financial Resolutions

Once again the time of year is upon us when it is commonplace to take stock of various aspects of our lives and make resolutions for the year – and even the decade – ahead. The problem is, too few people extend this to include their finances – and yet that is arguably one of the most important areas to review to ensure you are truly getting the best bang for your buck.

So, we’ve put together the top four financial resolutions for you to be considering as you look forward to 2015.

Resolution 1: Set clear goals
It is imperative to set clear and concise financial goals. Be specific and include actual figures and measurements. I’m sure you’ve heard this many times before, but sometimes the old ones are the best ones.

Resolution 2: Address your debts
Make a list of your debts and arrange them by interest rate. Prioritise paying off those with the highest rate and pay them off first before you start to save. It can be counterproductive to save when your debts are incurring higher interest than any savings might accrue.

Resolution 3: Build your savings
Once your debts are clear, set up a savings plan to ensure you make the most of the money you are putting away. We can help you build a bespoke programme that will ensure you maximise your opportunities with ISAs, pensions and the right investments.

Resolution 4: Review existing plans
Are you paying too much for your life assurance or other protection policies? When was the last time you reviewed your pension plan, will it provide for your retirement? When was the last time you analysed and compared your investments with the marketplace to ensure you maximise performance?

Further information

The New Year is a great time to review every aspect of life and start thinking about how you can improve them. Therefore, if you would like to discuss any of your financial matters in more detail, please do not hesitate to contact us.

In the meantime, happy new year and we look forward to helping you in 2015.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Paul Hoskin and Debbie Day at Hoskin Financial Planning in December 2014.

Season’s Greetings from Hoskin Financial Planning

As the Holiday Season is upon us, we find ourselves reflecting on the past year and on those who have helped to shape our business in a most significant way.
We value our relationship with you and look forward to working with you in the year to come.

We wish you a very happy Christmas and a prosperous New Year.
With very best wishes,

Paul Hoskin and the team at Hoskin Financial.

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 18th November 2014.

HMRC issues a warning to offshore savers

If you do have money held in an offshore deposit account, be aware that HMRC has started to receive information about overseas accounts under the EU Savings Directive.

You may receive a letter from HMRC urging you to declare your offshore assets, if you have not previously done so. This initiative is part of HMRC’s offshore evasion strategy and whilst no action is being taken against account holders yet, you should declare your offshore assets to HMRC to avoid any enforcement action.

HMRC will be privy to even more information later this year, through the new global standard of automatic exchange of tax information – which has been developed by the Organisation for Economic Co-operation and Development (OECD). The agreement for this is due to be signed in October.

To date, 44 jurisdictions have joined the initiative and they will be automatically exchanging information with each other in 2017, in respect of data collected from 31 December 2015.

There are alternative ways to hold assets offshore without any disclosure requirements, such as through offshore bonds.

The information regarding taxation is based on our understanding of law, HM Revenue & Customs practice and current legislation, which may be altered and depends on the individual financial circumstances of the investor.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 18th November 2014.

IHT bill causes sale of mountain in the Lake District

An example of how inheritance tax (IHT) can cause financial problems for a deceased’s family is illustrated by the story of a landmark mountain in the Lake District being put up for sale to help pay the tax bill.

I know that most of you will not own any mountains or be worth many millions, but it shows how people may be forced to put assets in a ‘fire sale’ in a desperate attempt to raise enough money to pay the tax bill.

This case concerns Lord Lonsdale, who died in 2006, leaving the title and estate to his eldest son Hugh Lowther – but along with that came an IHT bill of about £9 million.

Due to some on-going family disputes, which lasted for a few years after his death, there was a long delay before his personal representatives could begin raising the cash to pay the IHT bill.

IHT is normally payable within six months of the date of the deceased’s death (although tax can be paid by instalments over ten years for land and buildings, for example). In this case, however, the ten year period is close to expiry meaning the estate needs to raise a significant lump sum amount to settle the liability.

Some assets have already been sold and the mountain is likely to raise about £1.75 million. The mountain and its manor has been owned by the family for over 400 years, but now has to be sold off to pay the tax bill.

If you’re interested, it’s a 2,676 acre plot with the 2,850ft (869m) mountain. You also get grazing rights for 5,471 ewes, 732 hoggs [young sheep] and 200 lambs!

This story illustrates how an IHT liability on death can cut a swathe through the assets that you thought you were leaving to your family.

If you would just like to check how much IHT could be payable on your death, get in touch.

I will need an estimate of the value of your assets, including any mountains you might own!
The information regarding taxation is based on our understanding of law, HM Revenue & Customs practice and current legislation, which may be altered and depends on the individual financial circumstances of the investor.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Debbie Day at Hoskin Financial Planning on 18th November 2014.

Household spending power holds up with consumer inflation set to stay well below 2% target

The squeeze on household finances is reducing with consumer inflation either remaining unchanged or falling below 1.2 per cent last month, official data later today is expected to show.
It comes days after the Bank of England said consumer price inflation was likely to fall below 1 per cent in the coming six months and amid fresh worries over economies around the world as Japan slipped unexpectedly into recession.

While continued low inflation eases the squeeze on Britons’ finances after six years of wages growing slower than the cost of living, the sort of deflation currently faced in the eurozone would be of concern for policymakers.

The more inflation goes down, the more chances of a rate rise recede, with economists now not expecting the Bank of England to raise the base from its historic low of 0.5 per cent until later in 2015 – instead of early next year as previously expected.

This is also because of warnings over the health of global economies, with data from Japan today showing the economy shrank by 1.6 per cent in the thirds quarter, last week’s GDP data from the eurozone showing stagnation and slowing growth in China.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 5th November 2014.

New flexibility on pension lump sums

The tax rules are to be changed to allow individuals aged 55 and above to access their defined contribution pension as they wish from April 2015.

As part of the Taxation of Pensions Bill 2014, which was published in mid-October, the government is proposing to change the rules on taking pensions as a lump sum with the effect that people will be able to take a series of lump sums instead of only one.

Under the current rules, people who want to take their pension as a lump sum would take 25% of their pension pot free of tax and then place the other 75% in a drawdown account. Any money they take out of their drawdown account will then be taxed at their marginal rate.

Under the new tax rules, individuals will have the ability to take a series of lump sums from their pension fund, with 25% of each payment then free of tax and 75% taxed at their marginal rate, without actually having to enter into a drawdown policy.

“People who have worked hard and saved all their lives should be free to choose what they do with their money,” said Chancellor of the Exchequer George Osborne as these latest changes to the pensions saving landscape were announced.
“For some people, an annuity will be the right choice whereas others might want to take their whole tax-free lump sum and convert the rest to drawdown.”

The March 2014 Budget included a fundamental change to how people can access their pension, introducing measures to allow retirees to spend their pension pot as they choose, rather than having to buy an annuity. According to government figures, from April 2015, around 320,000 individuals retiring each year with defined contribution pension savings will be able to access them as they wish, subject to their marginal rate of tax.

Six months later, the Chancellor announced that, again from April 2015, people are to have the freedom to pass on their unused defined contribution pension to any nominated beneficiary when they die, rather than having to pay the onerous 55% tax charge that currently applies to pensions passed on at death.

With pensions saving clearly now a major focus for politicians and thus in a state of some flux, it is well worth considering seeking expert advice on your individual circumstances.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Debbie Day at Hoskin Financial Planning on 4th November 2014.

Is the housing market boom over? Mortgage approvals fall to lowest level in 14 months.
Mortgage lenders approved the lowest amount of home loans for more than a year last month adding to growing evidence the property market has run out of steam.
According to Bank of England statistics, loan approvals for house purchase fell to 61,267 last month, down from 64,054 in August – the lowest level in 14 months.
This is nearly 20 per cent below the 74-month high of 76,472 seen in January and comes after Land Registry data yesterday revealed property prices slipped 0.2 per cent last month.

The Land Registry figures showed house prices dipped in seven of 10 regions in England and Wales last month, including a 0.7 per cent blip in London.
The fall in mortgage approvals reported today is bigger than economists had forecast although are similar to drops also reported by the British Bankers’ Association last week
Howard Archer, chief economist at IHS Global Insight, believes the slowdown in mortgage lending can no longer be pinpointed solely on the Mortgage Market Review which came into force in April. MMR rules require lenders to ensure finances of potential borrowers are probed in more detail and also means they have to stress test them for future rate rises.
He said: ‘The falling back of mortgage approvals from January’s peak level was clearly initially influenced appreciably by the introduction of the new MMR regulations that came into effect in late April.
‘However, the fact that mortgage approvals are still falling and in September were 19.9 per cent below their January peak levels – after lenders have now likely got to grips with the new mortgage regulations – points to an underlying moderation in housing market activity.’

Charles Haresnape, chairman of the Intermediary Mortgage Lenders Association, said: mortgage approval figures show the last nine months have brought a series of peaks and troughs that are out of line with the usual seasonal patterns.
‘However, subsequent activity shows we are yet to settle back into stable growth, with another peak in July followed by two months of decline.’
The Bank of England figures also show a slowdown on the number of approvals for remortgaging, slipping to 30,500, compared to the average of 31,632 over the previous six months.
The number of approvals for other purposes was 9,241, compared to the average of 10,468 over the previous six months. The Bank of England added that net mortgage lending rose by £1.8billion last month, down from £2.2billion growth in August.
Richard Sexton, director of e.surv chartered surveyors, believes it will be a momentary blip. He said: ‘Lenders are now lowering prices to encourage borrowers back to the market with cheaper deals.
‘The mortgage market is much more sustainable than a year ago – the new regulation has seen to that – but the bottleneck is now demand and not supply. It’s not unreasonable to expect to see home lending.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Debbie Day at Hoskin Financial Planning on 7th October 2014.

The generation poorer than their parents: Wages for under-30s stuck in 15 year slump, Government warned
• Alan Milburn says slump has condemned under 30s to ‘wrong side of divide’
• Former Labour minster reveals generation’s wages have fallen by 10%
• Poverty pay is pricing workers in twenties out of buying their own home
• Wages for those in their twenties are back to where they were in 1998

The next generation will stay poorer than their parents throughout their lives unless ‘urgent action’ is taken to boost wages and slash youth unemployment, the Government’s social mobility Tsar has claimed.
Former Labour minster Alan Milburn said the recession had condemned those in their twenties to ‘the wrong side of the divide’ between those with good jobs and their own homes and those stranded on low pay.
He revealed wages for the under 30s had fallen by 10 per cent since the recession pricing people out of buying their own home. Wages for those in their twenties are back to where they were in 1998 – 16 years ago.
Half a millions young Britons were still out of work six years after the recession hit, Mr Milburn added.
He said the jobs crisis had even put an end to the traditional Saturday job for students. The proportion of 16 to 17-year-olds in full-time education who also work has fallen from 37 per cent to 18 per cent in a decade.
Mr Milburn told The Observer: ‘It is depressing. The current generation of young people are educated better and for longer than any previous one. But young people are losing out on jobs, earnings and housing.
‘This recession has been particularly hard on young people. The ratio of youth to adult unemployment rates was just over two to one in 1996, compared to just under three to one today.
‘On any definition we are nowhere near the chancellor’s objective of ‘full employment’ for young people. Young people are the losers in the recovery to date.’
The average pay of a 22-to-29-year-old is now £9.73 an hour, 10 per cent lower than it was in 2006. Eighteen to 21-year-olds meanwhile are on just £6.73, is 8.8 per cent lower than six years ago.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 10th September 2014.

Higher interest rates – ‘when’ not ‘if’

UK interest rates have languished at an all-time low of 0.5% since March 2009 in a strategy designed to shore up the UK economy through the pain and the aftermath of the financial crisis and recession.

As the economy continues to exhibit signs of sustained recovery, however, interest rates are now widely tipped to rise – and signs of dissent among Bank of England policymakers have fuelled speculation about the timing and scale of such an increase.

The Bank’s governor Mark Carney has emphasised that increases – when they come – will be both “gradual and limited” and rates are not expected to reach their pre-recession heights. The first increase in rates is widely expected to be announced during the first half of 2015 although Carney has stressed the Bank of England’s monetary policymakers have “no pre-set course”, adding: “Rates will go up only as far and as fast as is consistent with price stability as part of a durable expansion, with the maximum sustainable level of employment.”

The labour market remains “central” to the Bank’s decisions. The rate of unemployment is forecast to decline to 5.5% over the next three years while earnings growth, which has failed to keep pace with increases in the cost of living, is expected to pick up.
In particular, Bank of England policymakers intend to monitor pay settlements, which tend to cluster around the turn of the year, and real growth in wages is expected to resume around the middle of 2015.

The British Chambers of Commerce has urged the Bank of England not to act prematurely, cautioning that higher rates could undermine the UK’s economic recovery. Meanwhile, the Resolution Foundation think-tank has warned even a “relatively benign” increase in interest rates could lead to a surge in the number of UK households struggling with debt. The Bank of England is likely to remain vigilant, fearing inflation could present problems if interest rate increases are not implemented “prudently”. The rate of inflation has remained below its government set target of 2% since January 2014, reducing pressure on policymakers to increase interest rates.

Looking ahead, the discussion and speculation appear likely to continue, fuelled by fresh releases of economic data and signals from policymakers. Nevertheless, one thing looks relatively certain – an increase in UK interest rates would appear no longer a case of ‘if’ so much as ‘when’.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 27th August 2014.

Allocating Your Wealth

For many people, the prospect of retirement seems almost unreal: something that might happen in the distant future.

Nevertheless, it is important to plan ahead, and time is your most valuable weapon. Building sufficient assets to fund your retirement will take a long time, and it’s worth getting into the savings habit as early as possible.

Even putting a small amount away on a regular basis can make a difference over the long term. Investors receive income tax relief on their contributions to occupational and personal pension schemes, subject to certain limits. You can contribute up to £3,600 or 100% of your net relevant earnings (whichever is the greater), subject to an overall maximum of £40,000 in the tax year 2014/15. Your contributions to company pension schemes are deducted before income tax is calculated. For contributions to personal pension schemes, your pension provider will reclaim any tax that you paid before you made your contributions.

If you have worked for more than one employer, always check your previous company schemes and work out your entitlements.

It is also worth considering individual savings accounts (ISAs) which are tax-efficient ‘wrappers’: all income and capital gains generated by the investments held within are paid out free of further tax. The amount of money you can invest in an ISA is subject to an annual limit (£15,000 during the tax year 2014/15), and this can be invested in stocks and shares or cash.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 13th August 2014.

Income is the glue in your life

If making loved ones happy is what you live for, you’re not alone. Keeping your family safe and comfortable isn’t always easy, but there are one or two things you can usually count on.

We’d all like to think that a reliable, regular income is one of these. You work to keep a roof over your family’s heads, to keep good food on the table and to keep Tilly in tap dancing shoes. But what would happen if this income were taken away, if the “glue” that keeps your life together was lost due to ill health?

Thankfully, you don’t have to worry; income protection can ensure you have a constant “pay cheque”, even when you can’t work due to illness or injury.

Contact Hoskin Financial today and relax that your finances are protected, even when good health is hard to find.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Debbie Day at Hoskin Financial Planning on 12th August 2014.

Pensioner living costs hit £10,387-a-year, so do you have enough saved to cover the bare necessities?

People nearing their pension age can expect to fork out more than £10,000-a-year in living costs in retirement, research by Key Retirement Solutions has found.
The average cost of being a pensioner is £10,387-a-year, according to analysis that calculated how much over-65s spend on basic necessities.

The typical pensioner household will have an annual food bill averaging £1,563 – the biggest expense – with spending on housing and fuel costing £1,485.
The total outstrips the value of most people’s state pensions by thousands of pounds, putting pressure on anyone without any other savings, particularly single pensioners who can’t rely on a partner’s state pension.

The pressure is at its highest in the South East of England, where over-65s can expect to need an income covering £11,945 of costs every year, with London pensioners needing £11,322 and those in the East of England £11,144.
The new flat-rate state pension will be introduced in April 2016 and is expected to be worth around £8,000-a-year.

But not everyone will initially qualify for the full amount as they may have incomplete National Insurance records or will have their payouts reduced because they were contracted-out of the second state pension.

It’s crucial therefore that retirees have another source of income to supplement their state pension and cover the bare necessities.
Food for thought, if you need any help with assessing your current retirement income built up so far please contact me.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 30th July 2014.

The benefits of regular savings

In the world of investment, timing is everything. But, despite claims to the contrary, no one can predict what the market will do and when. This makes it difficult to decide, not only when to invest, but also when to pull out. However, by regularly saving into an investment fund, say, or through an Isa, you can benefit from what is known as ‘pound cost averaging’.

Compared with investing a large lump sum at a single price – which may or may not be the top of the market – regular saving mitigates that risk by putting in smaller sums at a variety of prices.

In a rising market, regular savings would underperform the growth of a single lump sum as the later investments would miss out on the early growth. However, in a volatile or falling market, the opposite is true. Later investments buy in at lower or alternating prices and therefore gain more when the market finally rises.

For new investors, regular saving can also be a deceptively easy way to build up a lump sum. Putting aside £50 or £100 a month can be achieved with a minimum of sacrifice – and will quickly grow as the months pass without you even noticing what is going on.

It can therefore be a convenient way to dip your first toe into equities. With only smaller amounts going in each month, the short-term ups and downs of markets will have less impact on your portfolio overall.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Debbie Day at Hoskin Financial Planning on 29th July 2014.

Get your in ISA early

You only receive one ISA allowance each year and, since it cannot be carried over, if you do not use it you will lose it.

The annual allowance for 2014/15 increased on the 1st July 2014 to £15,000 and all ISAs either Cash or Stock and Shares will be classed as one.

Plenty of investors wait until the last minute to utilise their allowance but there is no reason to delay. In fact investing early allows you gain maximum benefit from the associated tax breaks.

Start your research as early as possible and speak to your Financial Adviser about all of your options.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 17th July 2014.

Helping you get to grips with auto-enrolment

Workplace pensions are undergoing a revolution. Automatic enrolment has not only changed the UK pensions landscape, it has also placed new obligations on employers. If you run a company with one or more employees, auto-enrolment will affect you and you should be aware of these changes. So what do you need to do?

Under the new legislation, every employee will be entitled to save into a qualifying workplace pension. As their employer, you will be responsible for organising a suitable scheme that meets certain key criteria.

It is also important to allow plenty of time to prepare for auto-enrolment. The Pensions Regulator suggests employers allow at least 12 months before their “staging date”. You can find out your company’s staging date by entering your PAYE reference into the staging date tool on the Pensions Regulator’s website at http://www.thepensionsregulator.gov.uk/.

Auto-enrolment presents new challenges for British companies. You need to make the right decisions, not only for your employees, but also for your business. We can help you to understand your company’s move to auto-enrolment, ensuring a smooth transition and a positive outcome for you and your employees.

If you have any questions on auto-enrolment or would like to know more about how we can assist you and your employees, please do get in touch.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Debbie Day at Hoskin Financial Planning on 2nd July 2014.

The benefits of regular savings

In the complex world of investment, timing appears to be crucial. However, without the benefit of hindsight, it is an incontrovertible fact that no-one can predict what the market will do – or when.

This presents a problem for investors – not only to decide when to invest, but also when eventually to pull their money out of the market.

This is where the benefits of ‘pound-cost averaging’ – or, in laymen’s terms, regular saving – come into play.

Pound-cost averaging works on the basis that putting smaller amounts of money into a fund or other investment reduces the overall risk of investing at the wrong time. Compared with investing one large sum in a single transaction, the risk is mitigated by the fact that, over a period of time, your smaller, regular sums will be invested at a variety of prices.

In addition, regular saving is a great way to build up a lump sum from nothing. Setting aside a lump sum of £5,000 is a tall order for plenty of people. However, putting aside £100 a month from your income might be less of an issue – and the addition of investment growth or interest means that you could quickly build up a reasonable amount without necessarily noticing. And the longer you can leave that growing amount alone, the more impressive it potentially becomes.

Most investment products offer regular savings as an option, including investment funds, Individual Savings Accounts (ISAs), life assurance and pension plans.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Debbie Day at Hoskin Financial Planning on 17th June 2014.

UK pensions saving hits five-year high due to Auto Enrolment and the economy.

UK pension savings levels are at a five-year high, boosted by auto-enrolment and an improving economic environment, according to the Scottish Widows Retirement Report.

The report found that 53% of savers surveyed had adequate retirement provision, up from 45% last year.

The report, which is based on the responses of 5,000 individuals, is in stark contrast to the same time last year when it found savings had dropped to an all-time low with one in five people failing to put anything away for their pension.

At 53%, the number of people adequately saving for retirement is the highest it has been since 2009 when it was 54%. Prior to 2009 it was highest in 2005 at 55%.
The amount that people are saving monthly for their retirement is now £130 on average, up from £76 since 2006.

However, the report also revealed that one in three people said they had no idea of the extent to which their pensions, savings and investments would meet their retirement income needs.

If you need help or advice with assessing your retirement income please contact me, Mobile:07704311021 email:debday@hoskinfinancialplanning.co.uk website:debbiedayifa.co.uk

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 3rd June 2014.

NS&I Pensioner Bonds that will smash rates from banks and building societies

• As few as one million savers could get their hands on Government-backed deals
Announced in the Budget by Chancellor George Osborne, those over the age of 65 will be able to get their hands on attractive rates of either 2.8 per cent for a one-year deal or four per cent for three with the new National Savings & Investments products.

These rates are far higher than the offerings currently available to savers. The best one-year fixed currently is 1.9 per cent and best three-year 2.7 per cent.
Pensioners will be able to put up to £10,000 into these accounts, with NS&I allowing up to £10billion in the bonds.

It means there could be a mad scramble in the New Year to get the rates – if everyone maxed out the limit, only one million would be able to take advantage of the Pensioner Bonds.

The Government has signaled the pensioner bonds will be offering interest rates which the private sector is unlikely to be able to match.

The exact details of the NS&I pensioner bonds are not known yet, including whether or not they will be offered on a first-come first-served basis and how the process will work, information will not be confirmed until the Autumn Statement.

THIS BLOG/EMAIL NEWSLETER 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)

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 20th May 2014.

NISAs – a new phase for ISAs

Individual Savings Accounts (ISAs) enter a new phase from 1 July 2014. At present, ISA contributions for the 2014/15 tax year are capped at £11,880. The entire amount can be invested in a stocks & shares ISA, or up to £5,940 can be saved into a Cash ISA.

However, from 1 July 2014, the ‘New ISA’ (NISA) limit will increase to £15,000 and you can invest as much as you like of this allowance in cash, stocks & shares or a combination of the two.

Investors will also be able to transfer ISA savings from previous years freely between stocks & shares and cash.

Any ISA subscription made between 6 April and 30 June 2014 will be counted against the £15,000 NISA subscription and you will not be allowed to open up a new NISA for the current tax year from 1 July. Instead, you will have to top up the existing account.

Do check with your provider’s terms and conditions – particularly if you have already opened a fixed-rate cash ISA.

The range of investments that can be held within a NISA is also expanding and this is likely to lead to an increase in new products from providers that, in turn, will provide greater choice for savers.

One thing will not change, however – once it’s gone, it’s gone.

At the end of each tax year, you lose any unused ISA allowance, so make sure you act in good time and, if you are unsure about anything, do seek professional advice.

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)

Email Newsletter by Debbie Day at Hoskin Financial Planning on 20th May 2014.

Golden number for a comfortable retirement is £15,000-a-year – but you may need to cut out the coffee and takeaways to reach it.

Those who want to enjoy their later years in comfort will need to have an income of at least £15,000, a study has found.

State-backed pension provider NEST (National Employment Savings Trust) found a significant fall in living standards among people with a household income of less than £15,000-a-year in retirement.

Those who get between £15,000 and £20,000 meanwhile are able to comfortable cover their bills and living costs, and have disposable income left over to boot.

NEST, which provides pensions to members of the Government’s landmark automatically enrolment programme, said those auto-enrolled at 22 who save the minimum amount required under the law – which will be 8 per cent of salary from 2018 – should be able to get close to £15,000-a-year by the time they reach state pension age.

Small changes to spending habits, such as cutting down on smoking, drinking, eating out or buying coffee, would help younger workers build up thousands of pounds more for their pension, it added.

But those who are older, have started their saving later, and will reach state pension age sooner, face a more difficult task and must increase the amount they’re saving to reach the target.

‘Retirement is now more likely to be a gradual shift than a one-time ‘cliff edge’ event. Many people will have more time to save up and the latest reforms to pensions mean there’s more choice than ever for accessing retirement savings during later life.

The findings underline the message that tomorrow is worth saving for. However people access their retirement savings in future, the research suggests most people will want around £15k a year to live comfortably.

The study found that overall satisfaction with life among pensioners’ increased by 7 per cent for an extra £5,000 household income they have.

A third of pensioners meanwhile with less than £15,000 income find it difficult to afford their energy bills, while a quarter can’t always afford groceries.

To have your current pension income accessed please contact me. Debbiedayifa.co.uk

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)

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 7th May 2014.

Where there’s a will…

After a lifetime of building up assets and working hard to help provide financial security, you want to make sure the right people benefit. However, unless your wishes are written down somewhere, how is anyone to know what they are?

Writing a will could therefore be one of the most important things you ever do. Without written evidence, your assets could end up in the hands of the wrong people – or even worse, in the hands of the Government.

Did you know?

If you do not make a will, the assets of your estate become subject to the laws of probate. This means, depending on the size of your estate:

      –     Your spouse may not get everything you intend for them;

     Children may not get the share you desire – and step children will have no claim;

     ‘Common law’ spouses may get nothing;

     Long estranged relatives could take a share even though you never speak;

     Close friends and favoured charities are left out;

     Personal items might need to be sold to raise funds for death duties; and

     The Government could end up with an unnecessary chunk in Inheritance Tax

Consequently, even for the most straightforward case, it is essential to put your plans in place long before they might actually be needed. The more planning you do, the better you can ensure your beneficiaries get what you desire for them – and a continual review will keep those plans up to date as your circumstances change.

Further information

We offer a comprehensive estate planning and advice service which can make sure your every need is taken care of. Alongside basic will writing, we can also offer help setting up trusts and giving advice on tax planning to minimise any potential liability.

To take the first step towards securing your assets for the future contact us.

Kind regards 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)

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 23rd April 2014.

Budget Update – Pension Focus

Chancellor of the Exchequer George Osborne set about redrawing the retirement landscape in the 2014 Budget, introducing measures to allow retirees to spend their pension pot as they choose, rather than having to buy an annuity. The measures mean retirees will no longer be taxed at an onerous 55% if they look to access the rest of their pension pot after taking their tax-free lump sum.

With effect from 27 March 2014, they will be taxed at their marginal income tax rate although, for now, the portion that can be taken as a tax-free lump sum remains at 25%. Prior to this Budget, however, those with less than £2,000 in a pension pot could take it as cash. This year, this limit will rise to £10,000 for an individual pot and to £30,000 for people who have saved across a number of schemes. From 2015, the limits could disappear altogether.

The Chancellor also announced the introduction of a ‘pensioner bond’. Issued by National Savings & Investments from January 2015 for those aged over 65, this new bond will have an investment limit of £10,000 per individual. Rates have not been set but initial estimates suggest a three-year bond could pay up to 4%. This compares with a rate of some 2.7% from the best fixed rate bond on the market.

In a less headline-grabbing move, the Chancellor also announced plans to allow people aged 75 and over to continue to claim tax relief on pension contributions.

Kind regards Paul Hoskin, Director, Hoskin Financial Planning Limited

Email Newsletter by Debbie Day at Hoskin Financial Planning on 22nd April 2014.

TOP UP THE STATE PENSION

Anyone who takes their state pension before April 6, 2016 can buy an extra £25 a week through a new Government scheme. Known as Class 3A National Insurance Contributions, it is an  offer to those who will miss out on the higher, flat-rate state pension to be  introduced in 2016. The top-up income will be index-linked to protect it from inflation, and if you die a surviving spouse will inherit at least 50 per cent of the pension.

For an extra £1 a week of taxable pension income, a 65-year-old needs to pay £890. At age 75 this falls to £674. For the maximum £25 extra weekly income a 65-year-old needs to pay £22,250 and survive for at least another17 years to get back what they paid in.

Pensions expert Ros Altmann says buying an equivalent annuity on the open market would cost nearly double.

She says winners from the deal will be women who did not accrue rights to the additional state pension while they were working and the self-employed, who were excluded from the scheme.

‘If you are 65 now and live beyond 80 or so, you will probably get a good deal, even if inflation remains quite low,’ says Altmann. ‘Anyone reaching state pension age before April 2016 who has a shortfall and has money they might consider using for extra retirement income should consider buying extra state pension.’

But someone with a short life expectancy is less likely to benefit and it is also less attractive to a single person with no spouse. The offer will be open from October 12, 2015 to April 1, 2017.

For more information please do not hesitate to contact me.

Regards Debbie @ Hoskin Financial Planning

 

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 9th April 2014.

Budget update

Ahead of next year’s General Election, Chancellor of the Exchequer George Osborne delivered a Budget that provided considerable food for thought. The UK economy is now predicted to grow more strongly than previously forecast and to expand this year to a level greater than its pre-crisis peak. The UK’s budget deficit during 2014 is likely to be lower than envisaged at 6.6% and is now expected to achieve a surplus by 2018/19.

Business rate discounts and enhanced capital allowances in enterprise zones were extended for another three years. The Annual Investment Allowance was extended to the end of 2015 and doubled to £500,000. Export finance was doubled to £3bn and interest rates on this lending were slashed by one-third.

From 1 July, cash ISAs and stocks & shares ISAs will be merged into a single ISA with an annual tax-free allowance of £15,000.  The Chancellor also announced a new Pensioner Bond that will be available to everyone aged over 65 from January 2015.

Meanwhile, in what was probably the most controversial measure within the Budget, the Chancellor announced plans aimed at removing all tax restrictions on pensioners’ access to their pension pots. In particular, pensioners will no longer be obliged to purchase an annuity to fund their retirement.

Email Newsletter by Debbie Day at Hoskin Financial Planning on 8th April 2014.

Mortgage Market Review – From this month mortgage lenders will be able to quiz any area of finances.

Questions could include cost of childcare, commute and clothes shopping.

Families could be asked about their weekly food bill, the cost of childcare and how much they spend on clothes if they want a mortgage.

From this month, they can be asked about absolutely everything, said the Council of Mortgage Lenders.

The shake-up – the biggest in the mortgage market for a generation – will not just affect young people asking for their first home loan. 

From next month mortgage lenders will be able to grill applicants about spending habits, whereas before they only asked for three month’s worth of pay slips and some bank statements Homeowners who need to apply for a new mortgage when their current deal runs out could also undergo a grilling.

The changes are in stark contrast to the traditional system when applicants were just asked for three months of pay slips and recent bank statements.

According to a list from the Council of Mortgage Lenders (CML), which is not exhaustive, questions will be asked about spending on utilities, council tax, telephones and insurance. A list of new questions from the CML, lenders may ask about spending on clothes shopping or going out.  Other queries cover the cost of running cars and the daily commute, such as season tickets. Lenders might even ask how much you normally spend on clothes, going out, childcare or contributions to a pension.

“All borrowers will have to get used to answering more questions about how they spend their income as well as how much they earn,’

A couple with children, aged one and three, could be lent less money than parents whose two children go to school despite having the same household income. This is because the first couple are likely to have higher childcare costs.

Mortgage firms will also not lend to customers unless they will still be able to afford payments when interest rates rise. Known as ‘stress-testing’, it means checking if customers can afford the higher monthly costs. This raises the prospect of families being rejected even though the cost of a loan might never get as high as a bank predicts.

The new rules, known as the Mortgage Market Review, will start on April 26 and are the response to irresponsible lending before the financial crisis.

Enforced by the new regulator, the Financial Conduct Authority, the changes have been in the pipeline for nearly seven years.  An FCA spokesman said: ‘We are taking a common sense approach to help protect against the bad practices that saw  people get mortgages they simply couldn’t afford. Anyone who can afford a mortgage will be able to get a mortgage.’

For any help or advice on Financial Planning please contact Debbie Day on 07704311021 or visit the website: debbiedayifa.co.uk 

 

 

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 22nd March 2014.

Use your tax breaks

Benjamin Franklin’s view that nothing is certain except death and taxes has yet to be disproved. However, using the tax allowances granted by the Government can at least help mitigate the tax side.

At the basic level, there is a personal income tax allowance, an annual exemption from capital gains tax plus numerous tax credits dependent on your circumstances. Schemes like Gift Aid offer tax relief on donations to charity and there is also an Inheritance Tax (IHT) threshold below which nothing is due.

Alongside, there are tax efficient investment products, such as Individual Savings Accounts and pensions, which provide relief from both income and capital gains tax (CGT) to differing extents.  In addition, some individual assets are specifically exempt from CGT – your home, your car, certain personal jewellery, antiques and UK Government bonds (gilts).

In terms of Inheritance Tax (IHT), the threshold is £325,000 (£650,000 for married couples and civil partners) and the value of your estate above this is liable to tax. This can leave beneficiaries having to sell family heirlooms to pay the tax bill. However, there are exemptions available from this tax as well, and a little bit of planning can help you access the range of annual exemptions and allowances in advance. This can help you reduce the liability as far as is practical – or provide the means with which your beneficiaries can pay it without having to sell items of sentimental value.

Email Newsletter by Debbie Day at Hoskin Financial Planning on 21st March 2014.

Budget 2014: ‘No one will have to buy an annuity’

Chancellor George Osborne shocks annuity sector with changes to drawdown options for retirees.

Chancellor George Osborne has rocked the annuities market to its foundation by stripping away all caps and limits on drawdown in the 19th March Budget.

Mr Osborne said: “Pensioners will have complete freedom to draw down as much or as little of their pension pot as they want, anytime they want.

“No caps. No drawdown limits. Let me be clear: no one will have to buy an annuity.”

Among the sweeping changes to the way people fund their retirement, the government will

• cut the income requirement for flexible drawdown from £20,000 to £12,000;

• raise the capped drawdown limit from 120 per cent to 150 per cent;

• increase the size of a lump-sum small pot to £10,000; and

• increase the overall size of pension savings that can be taken as a lump sum, from £18,000 to £30,000.

In the most sweeping change, Mr Osborne announced savers will no longer face the 55 per cent penalty charge if they try to take the rest of their pension after their tax-free lump sum, but will rather be taxed at marginal rates – meaning as little as 20 per cent for most pensioners.

The move could be a huge blow to annuity providers, as it means savers can effectively can their whole pension as cash. Share prices of many listed annuity providers nose-dived in the immediate aftermath of the announcement.

Mr Osborne said the move showed the “trust” the government had in savers and will head off concerns over access to money that put some off saving, but some commentators were already signalling caution about the need for individuals to keep funds aside to fund their retirement.

All of the changes apply only to defined contribution pensions. Mr Osborne said changes could be brought in which would affect defined benefit schemes and bring rules into line with the reforms announced today, but that this would have to be legislated separately.

 

If you have any questions or need any help or advice please contact Debbie Day on 07704311021, or visit my website: www.debbiedayifa.co.uk

Email Newsletter by Debbie Day and Paul Hoskin at Hoskin Financial Planning on 10th March 2014.

ISAs

Individual Savings Accounts

Use it or Lose it.

You only receive one Isa allowance every tax year. This cannot be carried over into the next year, so if you do not use it, you will lose it.

The annual allowance for this current tax year 2013/14 is £11,520. Up to £5,760 can be placed in cash and the balance into stock and shares. We are now at that wonderful time of year where you can invest monies this side of the tax year if you haven’t already done so and again after 5th April with the 2014/15 allowance being £11,760 of which £5,880 can be placed in cash.

For stocks and shares ISAs, it can be seductive to try and ‘time’ your investment in and out, buying when prices appear cheaper. However, experts seldom manage to time the market on a consistent basis so non-experts are unlikely to fare any better. If you are concerned about market volatility, ‘drip-feeding’ money into the market on a regular basis can reduce the risk of buying at the top of the market and ensure you invest at a range of different price levels. This system can offer long-term benefits, particularly for nervous or first-time investors or at times of significant market volatility.

Regardless of how you invest your money, remember you only receive one allowance a year. It is therefore best to start as soon as possible.

For more information and advice please contact Debbie Day on 07704 311021 or Paul Hoskin on 01621 767200.

Email Newsletter by Debbie Day at Hoskin Financial Planning on 25th February 2014.

Stocks away!

 Shares outdo savings, bonds and gilts to earn investors the most over one, 10, 20 and 50 years

£1,000 in leading shares made £170 over a year, £629 over ten, £1,234 over 20 and £13,542 over 50.

Shares have roared back as the best asset to boost your returns over one, ten, 20 and 50 years.

An investment in equities earned more than cash held in a savings account, corporate bonds or gilts, according to the annual Barclays Equity Gilt Study.From a £1,000 investment, over one year you’d have made £170, over ten years £629, over 20 years £1,234 and over 50 years £13,542.

The Barclays study, which uses data stretching back to the nineteenth century, also highlights the importance of reinvesting income and the impact of doing this on the performance of various asset classes.

‘One hundred pounds invested in equities at the end of 1899 would be worth just £191 in real terms without the reinvestment of dividend income, but with reinvestment the portfolio would have grown to £28,386,’ it says. 

Reinvesting income: Impact on returns excluding and including inflation (source: Barclays)

Debbie Day at Hoskin Financial Planning

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 12th February 2014.

Nobody likes to think about getting ill, but mortgages, bills and general living expenses do not stop because you have to stop working.

There are no financial certainties these days and in the current economic climate it’s now more important than ever to protect yourself, so having reliable Income Protection Cover helps provide peace of mind and security. Extra commitments of, say, regular savings payments or investments for the future, could see your plans start to collapse. Income Protection Cover provides a regular payment, replacing your income, to help you maintain the lifestyle that you have worked to achieve.

Over 2.4 million people are claiming Employment and Support Allowance (ESA)*

Of these, 35% had been claiming for 10 years or more. You are statistically more likely to have a long-term serious illness than to die before retirement.**

State benefits help towards covering everyday costs, but with a maximum ESA of just £106.50, the majority of people believe that they could not survive on state benefits alone. Studies show that 15 million people would be financially at risk if they lost their main source of income.^

* gov.uk Oct 2013 ** Local adviser Oct 2013 ^ unbiased.co.uk 2012

A regular tax-free payment provides peace of mind, meaning that you can focus on the most important thing – your recovery.

Until the next time Paul Hoskin at Hoskin Financial Planning

Email Newsletter by Debbie Day at Hoskin Financial Planning on 11th February 2014.

Felixstowe Community Business Lunches

On Wednesday 22nd January I launched the first Felixstowe Community Business Lunch.

The aim of the monthly business lunches are to offer a great opportunity for like-minded people, in local businesses, to get together in a relaxed yet business focused atmosphere to discuss business as well as local issues. 

I am keen to encourage the business community of Felixstowe and surrounding areas to use the services of local businesses. The lunches will provide the opportunity to discover and meet businesses on your doorstep that could help you.

At our first meeting we had a very broad range of Businesses from Bespoke Sofa Makers, Dental Practises to Accountants and Solicitors.  We had a great time meeting other businesses and the feeling in the room was of great vibrancy and up beat discussions. 

The Brook hotel provided us with a lovely carvery and great hospitality. 

The business lunch meetings will be held on 3rd Wednesday of every month.  There will be no pressure to stand up and publicly speak, unless you want to of course. The Spotlight Speaker on 19th February is Mr Graham Denny of The BASIC Life Charity regarding the work that they do in the local community.  If you would like more information please contact me, Debbie Day on 07704311021 or alternatively http://www.debbiedayifa.co.uk/felixstowe-lunches/

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 21st January 2014.

Nobody likes to think about getting ill, but mortgages, bills and general living expenses do not stop because you have to stop working.

There are no financial certainties these days and in the current economic climate it’s now more important than ever to protect yourself, so having reliable Income Protection Cover helps provide peace of mind and security.

Extra commitments of, say, regular savings payments or investments for the future, could see your plans start to collapse. Income Protection Cover provides a regular payment, replacing your income, to help you maintain the lifestyle that you have worked to achieve.

Over 2.4 million people are claiming Employment and Support Allowance (ESA)*

If these, 35% had been claiming for 10 years or more. You are statistically more likely to have a long-term serious illness than to die before retirement.**

State benefits help towards covering everyday costs, but with a maximum ESA of just £106.50, the majority of people believe that they could not survive on state benefits alone. Studies show that 15 million people would be financially at risk if they lost their main source of income.

Paul Hoskin.

* gov.uk Oct 2013 ** Local adviser Oct 2013 ^ unbiased.co.uk 2012

peace of mind, meaning that you

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 7th January 2014.

Making Financial Resolutions

Once again the time of year is upon us when it is commonplace to take stock of various aspects ofour lives and make resolutions for the year ahead.

The problem is, too few people extend this to include their finances – and yet that is arguably one of the most important areas to review to ensure you are truly getting the best bang for your buck.

So, we’ve put together the top four financial resolutions for you to be considering as you look forward to 2014.

Resolution 1: Set clear goals

It is imperative to set clear and concise financial goals. Be specific and include actual figures and measurements. I’m sure you’ve heard this many times before, but sometimes the old ones are the best ones.

Resolution 2: Address your debts

Make a list of your debts and arrange them by interest rate. Prioritise paying off those with the highest rate and pay them off first before you start to save. It can be counterproductive to save when your debts are incurring higher interest than any savings might accrue.

Resolution 3: Build your savings

Once your debts are clear, set up a savings plan to ensure you make the most of the money you are putting away. We can help you build a bespoke programme that will ensure you maximise your opportunities with ISAs, pensions and the right investments.

Resolution 4: Review existing plans

Are you paying too much for your life assurance or other protection policies? When was the last time you reviewed your pension plan, will it provide for your retirement? When was the last time you analysed and compared your investments with the marketplace to ensure you maximise performance?

Further information

The New Year is a great time to review every aspect of life and start thinking about how you can improve them. Therefore, if you would like to discuss any of your financial matters in more detail, please do not hesitate to contact us.

In the meantime, happy new year and we look forward to helping you in 2014.

Paul Hoskin and all at Hoskin Financial Planning.

Christmas Email 2013.

Season’s Greetings from Hoskin Financial Planning

As the Holiday Season is upon us, we find ourselves reflecting on the past year and on those who have helped to shape our business in a most significant way.

2013 has been a busy and enjoyable year for Hoskin Financial Planning; we value our relationship with you and look forward to working with you in the year to come.

We wish you a very happy Christmas and a prosperous New Year.

With very best wishes,

Email Newsletter by Debbie Day at Hoskin Financial Planning on Tuesday 10th December 2013.

            Landscaping your finances – or maybe a New Year’s resolution?

In the autumn a diligent gardener will spend time tidying up the garden ready for winter, although a tidy, well-presented garden requires work all the year round.  I see my clients’ finances in much the same way – they need regular tidying up and ongoing work to ensure their financial plan continues to thrive.

Once a financial plan has been put in place, it is tempting to believe the paperwork can simply be tucked away in a drawer and forgotten.  However, like plants in the winter it may look like nothing is happening, but changes are still taking place.  I strongly believe that a financial plan needs to be reviewed at least annually.

A financial review will examine your goals; whether that is to retire at 60 or to fund school fees.  Life moves on and your circumstances may have changed, perhaps an addition to the family, a health issue or a change of job.  Your plan needs to consider whether you need to save more or to switch to different types of investments so you still achieve your goals.

A review will also look at an investor’s progress towards their goals and examine whether their investments are performing in line with expectations.  Fund managers will have good and bad periods, but your financial adviser will be able to judge whether this is expected or a sign of a deeper problem.  They’ll be able to tell you if it may be worth considering a switch to another manager.

A portfolio will also need to be tweaked according to the wider economic environment. 

The 2008 financial crisis changed the investment landscape, the low interest rates

mean income-seekers have had to work harder to achieve the same level of yield. 

While all the signs are that the economy is improving, it highlights the importance

of regular reviews to ensure your financial plan stays on track to meet your goals. 

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on Wednesday 4th December 2013

Building a core investment

It is important to think long term when considering your investment strategy. A portfolio with a solid foundation is well-placed to deliver consistent long-term performance and to cope with short-term market movements. As such, it is worth taking the time to think about your ‘core’ investment.

A core investment is a range of relatively lower-risk holdings around which the rest of your portfolio can be constructed. This approach is based on the assumption you will keep these investments for the longer term, while tailoring other parts of your portfolio to pursue medium-term or higher-risk strategies.

Although your choices will be driven by your personal attitude to risk and your circumstances, the principle is the same – that the majority of your portfolio is invested in mainstream funds and assets that provide a diversified mix. Your core investment can then be supplemented by a ‘satellite’ strategy that makes up a smaller proportion of your overall portfolio. This portion focuses on more specialist areas where you might choose to take a little more risk – for example, you could target smaller companies or exposure to overseas markets.

A core investment is designed to act as the focal point for your planning so, if you choose, you can then add some interest around the edges. Whichever type of core holding you select, always remember investment is for the long term and you should consider taking professional advice to ensure you achieve the right mix.

Need help and advice contact Paul Hoskin at Hoskin Financial Planning.

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 20th November 2013.

Property investment

Property investment offers the potential for significant capital growth, often accompanied by a regular income stream from rent.  Investments in property include residential or commercial property and agricultural land. Investors can gain exposure to the property market through several means – the direct purchase of so-called ‘bricks and mortar’; the purchase of shares in property companies; or through a specialist investment trust or mutual fund.

Property prices are influenced primarily by supply and demand, which is affected in turn by factors such as interest-rate fluctuations, the availability of credit and the broader economic cycle. Property values can rise and fall sharply, while rising interest rates can make credit less affordable, reducing demand and making property more difficult to sell.

The performance of property prices tends to be different from that of other asset classes and therefore property can provide valuable diversification benefits to an overall portfolio. However, in comparison with direct investment in ‘bricks and mortar’, shares in property companies tend to perform in a similar way to the broader equity market.

Investors can venture directly into the property market and buy ‘bricks and mortar but property can be slow and expensive to buy and sell. Investors wishing to dip a toe into the property market might do better to consider a collective investment in the property sector. Numerous diversified property and real-estate funds are available, focusing on a range of different strategies and undertaking all the expensive and time-consuming legwork.

For more help and advice please do not hesitate to contact us at Hoskin Financial Planning or Paul Hoskin direct on 07734 906264.

Email Newsletter by Debbie Day at Hoskin Financial Planning on 19th November 2013.

From sorting out wills to cutting tax bills … The vital reasons you HAVE to talk about money with the family

Families that don’t talk openly and honestly about their finances are missing out on great opportunities to save money, minimise tax and ease relatives’ grief in the future.

But amazingly, three-quarters of families hold back from having  conversations about money with their next of kin, according to research by pensions and investments company Standard Life.

Laura Shannon examines several vital areas where families could benefit from being upfront about finances.

Wills and power of attorney

Less than half of grandparents have talked about inheritance with their families, according to the report, but the cost of this silence is serious – as Linda Black recently discovered. 

Stress compounded her sadness following the death of her father Norman, aged 82, from a heart attack in the summer. He left only a handwritten will, dating from 2000, but significantly it had not been witnessed when he signed it. His wife, and Linda’s mother, Elizabeth, was sole executor and beneficiary but in the years since the will was drawn up she had been diagnosed with dementia and is now in a care home.  Despite Linda having power of attorney over her mother’s financial affairs, the process of sorting out her father’s estate is not straightforward.

Linda, 44, a project manager living in Edinburgh, says: ‘He would never tell my sister or me if he had a will, just that it was all taken care of. We now have to go through a very long, difficult and expensive process of sorting this out through solicitors and courts.’ That is likely to cost thousands of pounds, with a percentage taken from Norman’s estate to cover legal fees. Linda, who is married to Kenny, 45, says: ‘It might be a difficult conversation, but if parents understand what can happen after they are gone they might act differently. My dad was proud and didn’t want to talk about money, but he would never have wanted us to go through the pain we are experiencing.

‘It’s never too early to sort out something like power of attorney or a will.’

For further help and advice please contact Debbie Day at Hoskin Financial Planning.

Email Newsletter by Paul Hoskin at Hoskin Financial Planning on 6th November 2013

Auto-enrolment – one year on

Described as one of the “biggest shake-ups” in the history of UK pensions, the first year of automatic enrolment proved rather more successful than originally expected. Launched on 1 October 2012 , auto-enrolment requires employers to enrol their employees in a workplace pension scheme, unless the individual decides to opt out.

The first year saw a total of 1.6 million workers automatically enrolled into their workplace pension scheme. The programme began with the UK’s largest employers and will gradually expand to include the smallest companies. By 2018, between six and nine million people are expected to have increased the amount they save into a pension scheme or to have joined a scheme for the first time.

The National Employment Savings Trust (NEST) has found auto-enrolment is becoming increasingly popular with the public – only 18% of consumers now believe it is not a good idea, compared with 27% in 2011. Crucially, while earlier Department for Work & Pensions estimates had suggested opt-out rates could have been as high as 30%, NEST, found only 9% of employees have chosen to leave their pension scheme after being automatically enrolled.

NEST also found one-third of those who opted out did so because they could not afford to remain in the scheme, 15% did so because they were saving by another means and 14% opted out because they felt they were too close to retirement age. The under-30s were found to be the least likely to opt out compared with other age groups.

For more help and advice onb Auto-Enrolement contact Paul Hoskin at Hoskin Financial Planning.

Email Newsletter by Debbie Day at Hoskin Financial Planning on 5th November 2013

DO YOU KNOW WHERE ALL OF YOUR PENSION POTS ARE?

There are three billion pounds sitting around in unclaimed pensions in more than a million accounts. Don’t let your money be part of it.

With each of us now working an average of 11 jobs a lifetime it’s more likely than ever we will build up a number of different pension funds.

You are more likely to have lost track of pensions if you have changed employers, not kept good records or moved house.

Here’s what you need to do to make sure you get everything you’ve saved for.

1. Check your records

Take a look through all your paperwork to see what records you do have.

If you can’t find any pension details for periods when you were in employment it may be worth investigating further.

You may be getting annual statements from each of your schemes. If you don’t, you should get in touch once a year to make sure everything is still in order.

If you stop receiving your statements or you can’t get in touch with your scheme you’ll need to track them down.

2. Finding a lost pension

If you have stopped getting correspondence from a particular scheme, the first place to contact is the pension provider.

After that, try the company that employed you (if it was a workplace pension).

Details you should provide and template letters are available at the Money Advice Service.

3. Using the Government’s tracing service

If you can’t get hold of the pension provider or your former employer, the Department for Work and Pensions offers a free online tracing service to help find who is currently managing the pension scheme.

You can also contact the service by phone or post.

It has access to more than 200,000 personal and workplace pension schemes. The more information you can give, the more chance of your pension being traced.

If you have a lost pension and need help tracing it please contact Debbie Day.

Email Newsletter by Paul Hoskin on 23rd October 2013

Allocating Your Wealth

For many people, the prospect of retirement can seem almost unreal – something that might happen in the distant future.  Nevertheless, it is important to plan ahead and time is your most valuable weapon. Building sufficient assets to fund your retirement will take a long time and it is worth getting into the savings habit as early as possible. Even putting a small amount away on a regular basis can make a difference over the long term.

Investors receive income tax relief on their contributions to occupational and personal pension schemes, subject to certain limits.  You can contribute up to £3,600 or 100% of your net relevant earnings, whichever is the greater (subject to an overall maximum of £50,000 in the tax year 2013/14 ). Your contributions to company pension schemes are deducted before income tax is calculated. For contributions to personal pension schemes, your pension provider will reclaim any tax you paid before you made your pension contributions. If you work for more than one employer, always check your previous company schemes and work out your entitlements.

It is also worth considering individual savings accounts (ISAs) as income and profits generated by the investments held within these tax-efficient ‘wrappers’ are paid out free of further tax. The amount of money you can invest in an ISA is also subject to limits. That is £11,520 for the 2013/14 tax year, up to £5,760 of which can be saved in cash.

For more help and advice please do not hesitate to contact Paul Hoskin at Hoskin Financial Planning

Email Newsletter by Debbie Day 22nd on October 2013

Increased ISA Limit In April 2014

Isa limit set to rise to £11,760 in 2014 after inflation holds at 2.7% in September

The Isa limit is expected to rise to around £11,760 from next April, up from its current £11,520. Up to half – £5,880 – can go into cash Isas. 

The amount you can put into these tax-efficient investment and savings accounts rises each year in line with the inflation, as measured by the Consumer Prices Index.The cost of living rose by 2.7 per cent between September 2012 and 2013, the Government announced last week.     

The September figure is all-important to savers and pensioners. It is the cornerstone in deciding the rise in the Isa limits for the next tax year. It also plays a part in the rise in the state pension.

Pensioners can expect a 2.7 per cent rise in the state pension from next April – up from the current £110.15 a week to £113.10.

But the 2.7 per cent inflation rate is grim news for those with savings. Basic rate taxpayers need to earn an impossible 3.38 per cent before tax to match inflation, while higher rate taxpayers need 4.5 per cent.

For more help and information on your savings please contact Debbie Day.



Email Newsletter by Paul Hoskin 9th October – 2013

A better deal for pension savers

Pension schemes have fallen under the spotlight once again, with the Office of Fair Trading (OFT) recommending a range of measures designed to clamp down on the £40bn-worth of UK defined contribution pension schemes that fail to deliver good value to savers.

At present, around five million people are estimated to be saving into defined contribution pension schemes yet this could rise by a further nine million over the next five years as the process of automatic enrolment for workers gains traction. The OFT warned that many employers do not possess the “capability or incentive to assess value for money”, and this problem is likely to worsen as auto-enrolment continues to expand.

Some defined contribution schemes are too complicated to allow savers and employers to determine whether or not they truly offer good value. The OFT urged the government to take action to increase transparency and to make it easier for savers and companies to compare the qualities of different pension schemes.

The OFT also pressed the government to consider excluding from its auto-enrolment programme those schemes that penalise savers by imposing higher charges when savers cease to make payments. The OFT’s recommendations do not include a cap on annual management charges, although curbs on charges were not ruled out in future.

Excessively high management charges can substantially reduce the eventual value of a pension, and the annual management fees charged by some schemes established before 2001 can be significantly higher than schemes established more recently.

For further information please do not hesitate to contact me at Hoskin Financial Planning.

Paul.

Email Newsletter by Debbie Day 8th October – 2013

Are you missing out?

 Higher rate taxpayers miss out on £230m by not claiming pensions tax relief

More than 180,000 higher rate tax payers are missing out on an estimated £230million of ‘free money’ by failing to claim tax relief on their pension contributions.

Research from Prudential has found that a quarter of higher rate taxpayers on money purchase pension schemes fail to claim the full relief, which means around £229million is unclaimed each year.

People in the higher rate tax bracket can top up their pension savings by 40 per cent through tax relief, so that a £100 contribution to their pension pot only costs them £60

Higher rate taxpayers on workplace pension schemes should receive their tax relief automatically through their payroll.But not every occupational pension will do this, as some operate as Group Personal Pension and stakeholder schemes, which only provide 20 per cent tax relief automatically, meaning some people on workplace pensions may be unaware they are not getting their full entitlements.

Those with individual personal pensions meanwhile, such as Sipps and stakeholder pensions, will also have to claim back the extra 20 per cent. To get the rest, these people will need to fill out an annual self-assessment tax return, or can call HMRC to get back previously unclaimed relief.

The actual figure going unclaimed could be even higher than £230million, with 15 per cent of higher rate taxpayers surveyed by Prudential saying they’re unsure whether or not they’re claiming the extra relief.

Clare Moffat, Prudential’s tax expert, said: ‘Failing to claim higher rate pension tax relief can have a major impact on income and it is clear that a substantial number of higher rate taxpayers are not claiming relief they are entitled to.‘It can be worth as much as £1,255-a-year and there cannot be many people who would happily give up as much. Substantial numbers of higher rate taxpayers can take action now to significantly improve their pension savings.’

Those who have not claimed their relief in previous years can still do so, as the Government allows those who fill out annual tax returns to claim back relief on contributions dating back to the 2011/12 tax year.

Meanwhile those who don’t fill in tax returns can go back even further, claiming tax relief as far back as 2009/10, though they must submit their claims before October 31 to get relief for this year, after which they can only claim back as far as 2010/11.

For Help and advice please contact Debbie Day.

 

Email Newsletter by Debbie Day 24th September-2013

Enhanced annuities: Who can benefit?

Annuity rates at their lowest levels ever.

So those retiring with personal or company money purchase pension plans need all the help that they can get to increase their pensions.

One way of doing this is apply for an enhanced annuity. This pays a higher income for those with medical conditions which may reduce their life expectancy.

According to a recent survey from MGM Assurance, more than 70% those approaching retirement are missing out on increased annuity payouts because they do not apply for enhanced annuities.

How do they work?

At its simplest an annuity is a bet with the insurance company about how long you will live.

When you invest in an annuity, the life assurance company converts your pension pot into income payments (your pension income) which are paid for the remainder of your life.

This means that if you die before your predicted life expectancy, the insurance company will make a profit which is used to pay the incomes of those who live longer than predicted.

If you live beyond your predicted life expectancy, you will have won the bet with the insurance company – and will have received a higher pension than you would have got by simply investing your pension in safe investments and taking the same income payments.

There is no need for a doctor’s appointment ”

This is fine for those who are fit and healthy, but is not a good bet for those who are not in good health. To help boost the pension incomes of those who have below-average life expectancy, insurance companies offer enhanced annuities.

These are simply annuity policies that pay higher incomes to name but a few, those who:

·         Smoke

·         Take prescription medication

·         Have been to hospital recently because of a medical condition

·         Overweight, have high blood pressure or high cholesterol

Extra income

The amount of extra income depends on your actual state of health or your lifestyle.

For more information and advice please contact Debbie Day on 07704311021.

WWW.debbiedayifa.co.uk

Email Newsletter by Paul Hoskin 11th September-2013

Planning for retirement

People in the UK are living longer than ever, but many individuals are failing to make effective plans for their retirement. 

According to a survey by LV=, for example, 6.5 million British over-50s now expect to work for six years beyond the official retirement age because they cannot afford to retire While such an idea might appear viable now, however, it could seem very different at the age of 65, when ill-health, personal circumstances or lack of opportunity might prevent you extending your life in the workplace.

Meanwhile, according to Scottish Widows’ ‘Women & Pensions Report’, 43% of women will rely on joint savings with their partners in order to fund their retirement. Yet one in three UK marriages now end in divorce within 15 years and so it is important women take charge of their own retirement plans.

Pressure on household budgets can make it a challenge to find additional cash that can be earmarked for retirement. Nevertheless, it is worth reviewing your current expenditure to see how your lifestyle would be affected by retirement. Most of us have a finite number of years in which to put aside money for our old age and it is never too soon to start.

Above all, you need to plan early to allow as much time as possible to build your nest egg. Take control of your future – a financial adviser can help you to develop a suitable long-term savings strategy for you.

The only thing you cannot afford to do is nothing.

Don’t do nothing contact Paul Hoskin at Hoskin Financial Planning today.

Newsletter by Debbie Day on Tuesday 10th September 2013.

Economic data offers encouragement

Investor sentiment showed signs of improvement in the UK during July and share prices rose – although a certain amount of daily volatility was inflicted by a mixture of domestic and overseas newsflow. Generally, however, investors drew encouragement from

positive UK economic data and evidence of improving business confidence. According to the British Chambers of Commerce, business confidence has improved to levels exceeding the averages experienced during the recession, while UK export activity has expanded at its fastest pace since 1989

The blue-chip FTSE 100 index rose 6.5% during July, while medium-sized companies – represented by the FTSE 250 index –were up 7.8% and the FTSE SmallCap index grew by 6.3%. Looking ahead, significant external headwinds do remain, however, including China’s altering economic growth and unresolved problems in the eurozone.

Profit warnings from UK quoted companies fell during the second quarter of 2013 to their lowest level since 2011, according to Ernst & Young. UK quoted companies issued 54 profit warnings during the second quarter of 2013, compared with 72 during the

previous quarter. The highest number of profit warnings was seen in the software & computer services, travel & leisure, electronics & electrical equipment, media and support services sectors.

The construction and retailing sectors showed signs of picking up, although the environment remains challenging. While construction is recovering from a low base, retailers remain under significant pressure in a difficult and competitive environment.

Ernst & Young believes an increasingly benign economic backdrop will help to contain the number of future profit warnings. A significant proportion of companies remain confident of achieving their full-year profit targets but Ernst & Young warned

managements should continue to make adjustments in order to “make the most of what is still a relatively modest recovery”.

June saw UK equity funds experience their highest net retail sales since the final quarter of 2006, according to the Investment Management Association, with the UK the best-selling equity region during the month. The UK All Companies sector experienced a sharp but welcome reversal of fortune during June, moving from the worst-selling fund grouping in May to the fourth best. 

For more help and information please do not hesitate to contact Debbie at Hoskin Financial Planning.

Newsletter by Paul Hoskin 28-August-2013

ISA’s: How do you move on?

Sometimes, after owning your Isa for a few years, although you find yourself quite happy with the tax breaks and the provider, you might start to notice the underlying investments are no longer giving you what you need. Or you may simply wish to switch to a provider with a wider choice of funds because your circumstances have changed.

How can you shift your investment without endangering the tax benefits?

You are able to transfer the value of your Isa to a different manager at any time. Once you have made your choice, you complete your new manager’s ‘Transfer request form’ and it will take charge of requesting the proceeds of your existing plan.

However, investors must enact an official transfer. Closing one Isa and reinvesting the proceeds in another is deemed to be a withdrawal and, once you withdraw, you lose all tax benefits on the money taken out. You cannot reinvest and get the tax benefits back unless the amount you have falls within the current tax year’s unused allowance.

Having said that, while transferring is relatively straightforward, you should bear in mind that an investment, particularly in shares, is a long-term decision and your investment is likely to fluctuate. Therefore, make sure your investment is really not right for you, rather than switching just because of a short-term downturn in markets.

There are often charges involved in any transfer, so these need to be weighed up against the potential gains before shifting your portfolio so make sure you do seek advice first.

Newsletter by Debbie Day 27th August 2013

The painful reality for savers

Years of exceptionally low interest rates may have proved beneficial for many UK borrowers but savers continue to pay the price. Now it turns out the amount of money saved into individual savings accounts (ISAs) during the 2011/12 tax year registered its first annual drop since ISAs were first launched in 1999 .

Investors put aside a total of £53.5bn into ISAs during the 2011/12 tax year, compared with £53.7bn during the previous tax year, and the drop was largely attributable to a decline in the amount invested into cash ISAs. During the tax year in question, the amount of money invested into cash ISAs reached £37.7bn, compared with £38.2bn during the previous year, according to analysis from accountant UHY Hacker Young.

Meanwhile, personal finance website Moneyfacts.co.uk found the number of cash ISA deals – and the average rates available – has dropped dramatically. As of May 2013, 325 variable and fixed-rate cash ISA products were available, compared with 420 in April 2012. Moneyfacts also revealed the average long-term fixed-rate ISA offers 2.41%, compared with a rate of 3.58% in April 2012.

Against the weak economic backdrop of the past few years, the UK government has instigated various measures to encourage banks to lend – and to convince businesses and households to spend – in a bid to boost the economy. However, these measures have done little to encourage individuals to save.

The Bank of England’s Quantitative Easing programme has led to a sustained reduction in the rates banks were prepared to offer savers, and this trend is likely to have been exacerbated by the more recent Funding for Lending Scheme. Caught up in an

environment of miserly returns and persistent inflationary pressures, households have had little incentive to squirrel away their cash and many have focused instead on reducing their debts.

Nevertheless, it is important to remember the tax advantages of ISAs. All returns – whether income or capital – are free of tax, and the benefits can mount up over the long term. During the 2013/14 tax year, you can save up to £11,520 into a Stocks and Shares ISA , of which up to £5,760 can be saved into a cash ISA and the watchword is ‘use it or lose it’ – your annual ISA allowance is only available for a single tax year.

If you would like any help or advice with your Savings and Investments contact debbie day at debbiedayifa.co.uk

Newsletter 14th August by Paul Hoskin at Hoskin Financial Planning.

The burden of IHT

The threshold for Inheritance Tax (IHT) has risen in recent years to £325,000 for individuals and – with the option now to transfer any unused threshold to a spouse or civil partner – a total of £650,000 for legally joined couples (for the tax year 2013/14).

The relative level of house prices, however, particularly in the South East, means IHT is still a concern for many homeowners.

Before you look to offset it, however, it is important to establish what will accumulate as a potential liability. For most, the key contributor to their estate will be the value of their home and, even if this lies below the threshold, other elements can push an estate over the limit. For example, although people typically talk of the benefits of ISA investing – which shelters investors from capital gains and income tax – ISAs are not sheltered from IHT.

Nevertheless, there is action you can take, particularly if your liability is relatively small. Few people realise that they have an annual exempted amount that they can gift to someone. At £3,000 per year, this could go some way to reducing the overall estate.

As the Government looks to close potential tax loopholes it is always worth getting advice on what can and cannot be done to ease potential IHT burdens.

**Levels & bases of reliefs from taxation are subject to change. The FCA does not regulate some forms of IHT planning.

Newsletter 31st July by Paul Hoskin at Hoskin Financial Planning.

Living to 100

It has long been accepted that improvements in medicine, lifestyle and an understanding of the effects which habits such as smoking can have on our health means life expectancy is increasing.

Future generations are likely to enjoy much longer and healthier lives on average than their predecessors.

However, figures released in April 2011 by the Department of Work & Pensions illustrate more accurately exactly what that means. These figures suggest, of the under 16s already alive today, over a quarter are going to reach the age of 100 – and already, the average new-born female is going to live to over 90.

As Steve Webb, Minister for Pensions, commented at the time, this means that millions of people will spend over a third of their life in retirement. However, as the DWP were quick to point out, this news also coincides with a period during which pension savings are in serious decline.

An ageing population is putting our welfare system under significant pressure as more people need not only pension income but also healthcare, incapacity support and help within the home. You can therefore have little expectation that a State Pension will provide anything other than a safety cushion when the time comes.

If your retirement plans include holidays, visiting relatives and treating yourself on occasion, then its time to take control of your savings and start building up a retirement fund of your own.

Until the next time Kind Regards from Paul Hoskin at Hoskin Financial Planning

Newsletter 30th July by Debbie Day at Hoskin Financial Planning.

Don’t leave it too late! A quarter of Britons ‘haven’t thought about their retirement finances’

A worryingly high number of adults are not planning for life after work, according to the latest survey that points towards a retirement crisis that is facing the UK.

Almost a quarter of the people who responded to Capita Employee Benefits’ research admitted they ‘haven’t thought about’ how they will survive financially when they retire.

Poor quality pension plans and insufficient pension saving could see millions of people forced to work longer before they retire, or rely more heavily on the state in their later years.

But it appears this hasn’t even crossed the minds of many Britons, many of whom appear to be labouring under misapprehensions about their retirements, with three-quarters still believing they will retire before the state pension age – which will reach 67 in 2028 – even though they’re not saving enough.

David Tildsley, a director at Capita, said: ‘There seems to be a considerable gap between how and when people expect to retire and the ways they are making provision to do so.

‘Too many are still relying wholly or predominantly on the state pension…in spite of the fact that demographics suggest that this may well be unsustainable by the time many retire.’

One in six 45 to 54-year-olds told Capita they hadn’t thought about surviving financially in retirement, while 5 per cent of 55 to 64-year-olds said the same.

Capita has said that some people are looking at alternative ways of funding their retirement other than pensions, such as selling their home, moving to somewhere cheaper in the UK or overseas, inheritance, and part-time work.

Figures from the Office of National Statistics last week revealed that workplace pension scheme membership had fallen to its lower levels.

This will be rectified by the introduction of automatic enrolment, with 10million workers expected to be put onto pension plans over the next five years.

But this will not solve the growing issue that is the considerable gap in retirement planning.

For a free pension review with more help and advice contact Debbie Day at www.debbiedayifa.co.uk

 

Newsletter 16th and 17th July by Debbie Day at Hoskin Financial Planning

Don’t get caught by ‘pension liberation’

Despite tentative signs of economic recovery, times remain hard for many people. The cost of living continues to rise faster than wages and unemployment remains high. For those struggling to finance their day-to-day living, the idea of ‘pension liberation” ‘might sound attractive – but there are serious long-term risks.

Pension liberation involves the transfer of an individual’s pension savings to a scheme allowing them to gain access to the funds in their pension pot before the key age of 55. However, an “unauthorised payment” from a pension scheme is likely to incur tax

charges of more than 50% of the total value of the pension pot . Although there are certain rare situations, such as a terminal illness, that might permit a scheme member to access their funds early, dipping into your pension pot before the age of 55 will almost certainly land you with a substantial tax bill.

The Information Commissioner’s Office (ICO) has reported a “dramatic” rise in unsolicited approaches to pension scheme members, encouraging them to withdraw a proportion of their savings before the age of 55. The ICO estimates up to £400m has been released from legitimate UK pension schemes into schemes that range from high-risk to non-existent. Some members have had to absorb unexpected and substantial administration fees and taxes while others have had to face the fact their savings have been taken by fraudsters.

It is important to differentiate between pension liberation fraud and ‘pension unlocking’ – a legitimate move that allows a pension scheme member, aged 55 or over, to release up to 25% of their pension savings as a tax-free lump sum.

The ICO reports that “spam” text messages relating to pension liberation have more than tripled during the past six months.  Meanwhile, the Pensions Advisory Service has warned that pension liberation fraud is on the rise in the UK, and police investigations into pension liberation schemes have stepped up. Although the Pensions Regulator provides information for pension scheme trustees, there is still no law empowering trustees to prevent the transfer of a member’s pension savings into a liberation scheme.

For free help and advice please contact Debbie Day at www.debbiedayifa.co.uk

 

Newsletter 03-07-2013 by Paul Hoskin at Hoskin Financial Planning

Seek independent advice

Securing your financial future is now more important than ever. We are continually being told about the pressures on state benefits, particularly pensions, as the welfare state has to adapt to an expanding and ageing population.

As a result, more responsibility is being placed on us, as individuals, to make the most of our own savings and investments and prepare for our own futures.

At the same time, however, making these decisions is becoming ever more complicated. There are hundreds of providers offering thousands of products, all with different benefits for different needs at different prices.

As independent financial advisers, we look at the whole market to find out who is offering what products and how the different options can meet different individual circumstances. We are registered with the Financial Conduct Authority who monitor the way in which we give advice and, being independent, we are not limited to just one or small handful of providers.

We can seek out the most suitable products to match your particular circumstances and thereby help you meet your goals.

For more help and advice please do not hesitate to contact Paul Hoskin at Hoskin Financial Planning.

Newsletter 02-07-2013 by Debbie Day at Hoskin Financial Planning

Is inflation eroding your savings?

The likelihood is YES. The Office of National Statistics released the latest inflation figures, the UK consumer price index grew by 2.7pc in the year to May 2013, up from 2.4pc in April.
This means that a basket of goods and services that cost £100 in May 2012 would have cost £102.70 in May 2013.

May’s annual rise in the consumer prices index (CPI) is up from 2.4pc in April, said the Office for National Statistics (ONS), and above economists’ forecasts of 2.6pc.
The ONS data showed the cost of flights rose by more than a fifth between April and May, the biggest jump between the two months since records began in 2001.
Although petrol and diesel costs fell by around 3 pence per litre between April and May, the ONS said that prices had fallen by less than a year ago. Transport costs contributed around 0.2 percentage points to the rise towards the rise in inflation, according to the ONS

To match the rate of inflation, a basic rate taxpayer needs to find a savings account paying 3.38pc a year, while a higher rate taxpayer needs to find an account paying at least 4.5pc.
But the average no notice account pays 0.7pc interest now, compared to 1.05pc a year ago.

If you are concerned that your savings are not keeping pace with inflation please contact Debbie Day at DebbieDayIFA for help and advice.

Newsletter 19-06-2013 by Paul Hoskin at Hoskin Financial

The most common mistakes

“To err is human” said Alexander Pope – but in investment, to err is expensive. What you can do, however, is look at the mistakes of others and try to avoid the most obvious pitfalls.

Investors can make many mistakes but one of the most common is to follow the herd. When markets are high, they can scramble to invest, thinking they might miss out. Then, when markets are falling, they often sell out. The most recent example of both issues was the ‘dot.com’ boom. This first persuaded millions of investors to part with their savings thinking they were missing out on a chance to make ‘easy’ money. Unsurprisingly, the bubble then burst and many scrambled to get out without a thought about what might happen next.

The lesson is not to get carried away in the moment – either to invest or to sell. Stories of large falls in markets can make investors nervous – but this is the nature of equity investment and selling on a short-term dip simply crystallises a loss – and can also mean missing out on both the eventual return to normality and the longer-term benefits. Markets will always go down as well as up – so if you are scared by such volatility, take advice. Perhaps equities are not for you.

Finally, investors often believe they can time markets yet experts agree this is a near-impossibility. Investment should never be gone into lightly. Be clear about your objectives, your timelines and the risks – and make sure your portfolio is run accordingly.

For free help and advice please do not hesitate to contact Paul Hoskin at Hoskin Financial

Newsletter 18-06-2013 by Debbie Day

Take control of your pension

Although there is no bad time to review your retirement arrangements, with all the changes taking place in the sector, now is a particularly appropriate moment to ensure you are making the most of your pension.

* Lost and found: Research conducted by Age UK has found a quarter of UK adults have lost track of at least one pension accumulated during their careers. The average individual aged over 65 has worked for at least five employers – and a quarter of those aged between 25 and 34 have already worked for a similar number. Given this, we are more than likely to have several different pension pots. To trace a missing pension, try contacting the Pension Tracing Service at https://www.gov.uk/find-lostpension or call 0845 6002 537.

* Consider your options – but take care: If you have several different pension pots, you might consider consolidating them into one. Most occupational and private pension schemes can be transferred and consolidating all your pension savings is likely to
cut administration and paperwork, make it easier for you to track the performance of your pension pot and could also reduce costs. Do proceed with caution, however, and take expert advice – once made, the decision to switch is irreversible and a wrong
decision could incur harsh penalties.

* Take a closer look: Every year, your pension provider should send you a statement showing the current value of your pension pot, and a forecast of what it will be worth when you reach your retirement age. Don’t just file it away – take a closer look. Does
the projected value of your pension pot bear any relation to the amount you are aiming for? If not, consider what action you could take to boost its value – perhaps you could work longer or boost your pension contributions. At present , you can pay up to £3,600 or 100% of your earnings (whichever is larger) every year and receive tax relief on contributions of up to £50,000.

* Focus on the future: Finally, while we may talk about “retirement age”, do you actually know your state pensionable age? Not so long ago, men used to retire at 65 and women at 60 but times have changed. The age at which you become eligible for your
state pension – and the amount you receive – is determined by your National Insurance contributions. Find out more using the government’s State Pension Calculator at https://www.gov.uk/calculate-state-pension.

For more help and advice contact Debbie Day at www.debbiedayifa.co.uk

Newsletter 05-06-2013 by Paul Hoskin

The benefits of regular savings

In the world of investment, timing is everything. But, despite claims to the contrary, no one can predict what the market will do and when. This makes it difficult to decide, not only when to invest, but also when to pull out. However, by regularly saving into an investment fund, say, or through an Isa, you can benefit from what is known as ‘pound cost averaging’.

Compared with investing a large lump sum at a single price – which may or may not be the top of the market – regular saving mitigates that risk by putting in smaller sums at a variety of prices.

In a rising market, regular savings would underperform the growth of a single lump sum as the later investments would miss out on the early growth. However, in a volatile or falling market, the opposite is true. Later investments buy in at lower or alternating prices and therefore gain more when the market finally rises.

For new investors, regular saving can also be a deceptively easy way to build up a lump sum. Putting aside £50 or £100 a month can be achieved with a minimum of sacrifice – and will quickly grow as the months pass without you even noticing what is going on.

It can therefore be a convenient way to dip your first toe into equities. With only smaller amounts going in each month, the short-term ups and downs of markets will have less impact on your portfolio overall.

For more help and advice contact Paul Hoskin at Hoskin Financial Planning to arrange a Free MOT as part off your long term financial planning.

Newsletter 04-06-2013 by Debbie Day

ISAs

Individual Savings Accounts

Use it or Lose it.

You only receive one Isa allowance every tax year. This cannot be carried over into the next year, so if you do not use it, you will lose it.

The annual allowance has been raised and for 2013/14 it is £11,520. Up to £5,760 can now be placed in cash and the balance into stock and shares, alternatively you can place all of the £11,520 into stocks and shares. Although plenty of investors wait until the last minute to use their allowance, however, there is no reason to delay and investing early means you gain greater benefit from the tax allowances – for example, the earlier you put your money into a deposit account, the more interest you will earn.

For stocks and shares ISAs, it can be seductive to try and ‘time’ your investment in and out, buying when prices appear cheaper. However, experts seldom manage to time the market on a consistent basis so non-experts are unlikely to fare any better. If you are concerned about market volatility, ‘drip-feeding’ money into the market on a regular basis can reduce the risk of buying at the top of the market and ensure you invest at a range of different price levels. This system can offer long-term benefits, particularly for nervous or first-time investors or at times of significant market volatility.

Regardless of how you invest your money, remember you only receive one allowance a year. It is therefore best to start as soon as possible.

For more help and advice please contact Debbie Day or Paul Hoskin at Hoskin Financial Planning. 

Newsletter 23-05-2013 by Paul Hoskin

Don’t lose out to inflation

Low interest rates may be great news for borrowers but they can have a devastating effect on the long-term wealth of savers.

With inflation currently running far in excess of base rates, even though the value of your capital may be safe, the buying power of your money is being eroded. Therefore, you need to keep a close eye on the interest rates you are earning.

Nowhere is this more apparent than with Cash ISAs. According to Moneyfacts, at the start of 2013, the average cash Isa paid just 1.74%, compared to 2.55% 12 months earlier. With rates of 3% available, however, it suggests consumers are not shopping around.

It is good practice to retain some cash in an easy-access, readily available deposit account to make sure you can cover unforeseen emergencies and short-term needs. However, there is no reason to tie up all your cash holdings in this type of account. Research by consumer rights campaigner Consumer Focus has found around three-fifths of cash Isa holders never withdraw money from their account. Interest rates can be significantly higher for those willing to sacrifice some flexibility.

“Putting a reminder in your calendar now to shop around for a better cash-Isa rate in a year’s time is essential if you want a half decent return,” suggests Consumer Focus. “Unless you check your rates each year you are likely to end up with a poor return on your savings.”

For Independent advice contact Paul Hoskin at Hoskin Financial Planning

Newsletter 21-05-2013 by Debbie Day

What happens to the money in pension pots if nobody claims them? And should you worry about losing one?

Pension hunting: Younger workers are expected to move jobs far more often and have many different pension pots, but what happens if someone loses one and doesn’t claim it?

Steps are being taken to cut the number of lost workplace pension pots which are left stranded, or ‘dormant’, as workers move from job to job.

At current rates, the Department for Work and Pensions anticipates there will be 50 million dormant workplace defined contribution pension pots by 2050, which will contain £757billion in unclaimed cash.

Introducing a new ‘pot follows member’ regulation will mean pensions automatically follow workers when they join a different workplace scheme. It is anticipated this will cut the number of people with five or more dormant pots from one-in-four to just one-in-30.

But what happens to the money invested in these stranded pots if they remain unclaimed once the holder reaches retirement age, or dies?

In most cases in the event a pension pot is dormant after a period of some years,  every effort will be made to contact the pension holder or, if they are no longer alive, one of their relatives who could stand to benefit from their retirement savings.

With a Trust based scheme according to current legislation, if a member’s benefits still remain unclaimed for six years (from when they reach their selected retirement age, or after their death), the member will cease to be entitled to those benefits.

‘However, the trustees can still decide – at their discretion – to pay all or part of the benefits to the member or another beneficiary.

With a Personal Pension there is a slightly longer period of dormancy than for trust-based pensions – 10 years – before the money gets paid to the state.

But with people working on average for 11 different employers during their working careers and with a prediction of 50 million dormant pension pots at current rates by 2050, some do slip through the net.

Old pensions from several decades ago in particular are more difficult to trace, as the companies running the workplace schemes may not exist anymore, or have been the subject of several takeovers.

We would therefore actively encourage that you make sure your personal details are kept up-to-date. With more and more workers regularly switching employers, and estimates of over £3billion in unclaimed pension funds now being quoted, it is vital that everyone takes a closer look at their pension savings.

For more help and advice please contact Debbie Day at DebbieDayIFA or Paul Hoskin at Hoskin Financial Planning.

 

Newsletter 08-05-2013 by Paul Hoskin

Time for a portfolio health-check

Once a financial plan has been put in place, it is tempting to believe the paperwork can simply be tucked away in a drawer and forgotten. However, like a well-kept garden, a financial plan needs regular tending to help it thrive.

What should a financial health check comprise?

A financial review will first look at whether an individual’s goals – to retire at 60, say, or to fund school fees – have changed, perhaps following the birth of another child or a change of job. It should consider any need to save more or to switch to different types of investments to achieve the set goals.

A review will also look at an investor’s progress towards their goals and examine whether their investments are performing in line with expectations. Fund managers, for example, will have good and bad periods but your financial adviser will be able to judge whether this is expected or a sign of a deeper problem. If it is the latter, it may be worth considering a switch to another manager.

A portfolio will also need to be tweaked according to the wider economic environment. The 2008 financial crisis changed the investment landscape – for example, the low interest rates that have followed mean income-seekers have had to work harder to achieve the same level of yield. While an event of this magnitude will hopefully not repeat itself in the short term, it highlights the importance of regular reviews and ensuring your financial plan continues to be appropriate.

For a free health check of your finances please do not hesitate to contact Paul Hoskin at Hoskin Financial Planning

Newsletter 07-05-2013 by Debbie Day

Interest Only Mortgages ‘a ticking time bomb’

More than a million homeowners with interest-only mortgages will not be able to clear their loan at the end of its term and will be force to pay more or sell up if they don’t act, the City watchdog has warned.

Around half of the 2.6million homeowners with interest-only mortgages due to mature in the next 30 years will have not have enough money to repay the full loan amount based on their current behaviour, the Financial Conduct Authority (FCA) said.

Interest-only borrowers clear the interest that builds on the loan amount, but do not repay any of the capital. Borrowers are supposed to have a repayment vehicle set aside so that they can clear the whole debt, such as the endowment investment policies that were sold as part of endowment mortgages.

However, the FCA analysis, the most comprehensive yet of the interest-only problem, suggests that one in ten have no such plan while half, or 1.3million, will be left with a shortfall because it won’t clear the debt.

The most pressing cases are 600,000 borrowers with loans maturing between now and 2020. Of these, 300,000 are predicted to face a shortfall and a third of these, some 100,000, will face shortfalls of £50,000 or more. The figures exclude buy-to-let mortgages.

Regulators said it had asked mortgage lenders to write to the most at-risk borrowers to warn them. It has urged them to treat borrowers faced with a shortfall ‘fairly’, although it also acknowledged that borrowers had a responsibility to repay the money they borrowed.

Although 90 per cent of borrowers said they had some plan in place to repay their debt, those plans were often uncertain – 9 per cent said they planned to use inheritance to help clear the debt.

Martin Wheatley, chief executive of the FCA, who previously described interest-only mortgage shortfalls as a ‘ticking time-bomb’, said: ‘My advice to borrowers is to not bury your head in the sand – take action now. Understand the terms of your mortgage agreement and take control; work out if you can repay the outstanding amount when your mortgage matures. But you must engage with your lender to discuss how you propose to repay the outstanding loan.

‘This is a landmark piece of work and it comes at a critical time: lenders, regulators, and borrowers need to ensure that they grasp the nettle now before it is too late.’

Borrowers stuck with a shortfall at the end of their mortgage term have limited options. They can try to remortgage, or else will have to sell their home and move.

Their ability to remortgage will depend on the level of equity they have in their home and their ability to afford repayments.Remortgaging to a repayment loan will increase the amount they have to pay each month, while those at or near retirement may find it hard to remortgage for a term that stretches beyond working age.

For more help and advice please contact Paul Hoskin at Hoskin Financial or Debbie Day at Debbie Day IFA.

Newsletter 25-04-2013 by Paul Hoskin

Individual Savings Allowance (ISA) Limits

For the 2013/14 tax year, investors are able to save up to £11,520 in an ISA, which represents a rise of 2.1% over the previous year. The maximum ISA contribution of £11,520 may be invested entirely in a stocks and shares ISA or up to half the amount – £5,760 – can be saved in a cash-only ISA. Investors who choose to put less than that amount in their cash ISA may put the balance of their allowance in a stocks and shares ISA.

According to the Investment Management Association, net ISA inflows in the 12 months to April 2012 were almost £1.35bn and research by the trade body has consistently suggested investors would invest more if the allowance was increased. Meanwhile, according to HM Revenue & Customs, more than 13.7 million individuals subscribed to ISAs in the last tax year.

ISAs are tax-efficient vehicles that allow individuals to save and invest without having to pay income tax or capital gains tax. ISAs can be a good way for people to start saving, or to add to their existing savings and investments.

If you cannot afford to take advantage of the full annual allowance, it is still worth putting away what you can via a regular savings plan, which can start from £50 a month.

 

Do not forget one of the golden rules of ISA investing

– if you do not use it, you lose it –

so try and make the most of your allowance each year.

 

For help and advice please do not hesitite to contact Paul Hoskin at Hoskin Financial Planning.

 

Newsletter 23-04-2013 by Debbie Day

Just how much did the markets love Maggie?

Margaret Thatcher’s free market philosophy gained a rapturous response from the FTSE All Share during her time in power. But how do those returns compare with the market reaction to other PMs?

Margaret Thatcher

FTSE All Share return during premiership: 263.4%

Annualised return: 11.8%

Margaret Thatcher, who died on Monday 8th April 2013 aged 87, entered office following the winter of discontent amid public anger at Labour’s inability to control the unions. During her 11 years in power, she tackled the unions and rolled back the state in imposing her free market vision on the UK.

Over the course of those 11 years, markets responded largely in awe of her leadership. The FTSE All Share stood at 283 points when she arrived at office, and when her premiership ended following a dramatic coup with the Conservative party, it stood at 1031, representing a 263.4% rise. See below  how the markets responded to the UK’s other prime ministers of recent times, starting with Alec Douglas-Home.

 

Alec Douglas-Home

FTSE All Share return during premiership: 2.4%

Annualised return: n/a

Harold Wilson (first term)

FTSE All Share return during premiership: 19.0%

Annualised return: 11.8%

Ted Heath

FTSE All Share return during premiership: 8.4%

Annualised return: 2.2%

Jim Callaghan

FTSE All Share return during premiership: 71.8%

Annualised return: 19.2%

John Major

FTSE All Share return during premiership: 107.7%

Annualised return: 12.0%

Tony Blair

FTSE All Share return during premiership: 57.0%

Annualised return: 4.5%

Gordon Brown

FTSE All Share return during premiership: -18.2%

Annualised return: -6.8%

David Cameron

FTSE All Share return during premiership: 20.8%

Annualised return: 7.3%

 

By Debbie Day at Hoskin Financial Suffolk 

Newsletter 10-4-2013 by Debbie Day

Relax and enjoy your retirement: What you need to know about annuities and how to make the most of your pension pot

Once you’ve bought an annuity there’s no going back, so you’ve got to get it right first time.

But, worryingly, having carefully saved for years to build up a nest egg, many pensioners are missing out on thousands after picking the wrong annuity plan.

This is because many simply take up their insurer’s average payout rate once they reach retirement, instead of understanding the importance of shopping around for better rates.

 

OPEN MARKET OPTION (OMO)

With most pensions, you automatically have what’s called an open market option (OMO). This means you don’t have to take the pension offered to you by your pension provider, but have the right to take your built-up fund to another provider to get a higher annuity rate.

 

The Association of British Insurers (ABI) has introduced a new ‘Code of conduct on retirement choices’ to help individuals secure the best possible deal for their retirement income.

 

Under the code, insurers now have to write to people approaching retirement to spell out their options. Insurers will have to explain the different ways that retirement income can be taken, including provision for dependants and the possibilities of an enhanced annuity and protection against inflation.Moreover, insurers are no longer allowed to include annuity application forms in their literature – a move designed to increase the likelihood individuals will shop around.

 

With rates on standard annuities at an all time low, it has never been more important that retirees shop around in order to make the most of their pension pots.

But, to make matters more complicated, comparing market rates for the best deal is no longer enough.

You also need to know what kind of annuity is best for you.

Should you go for an investment-linked annuity?

Or a guaranteed income for a fixed period – say for five years?

Picking the right strategy, and possibly diversifying your portfolio is now an important part of planning your annuity income.

Although at first it may seem a complex topic, you will soon realise annuities are more straightforward than you think.

How to get the best annuity and what they do

An annuity is a pension investment that guarantees to pay a secure income for the rest of your life, no matter how long you live.

In the UK there are basically two types of annuities; pension annuities (compulsory purchase) and purchased life annuities (voluntary purchase).

Unless you have a defined benefit pension, typically work final salary schemes, most people will need to use the pension pot that they have built up to buy an annuity, which will give them an income for the rest of their life.

Pension rules allow you to take a tax-free cash lump sum of up to 25 per cent of a pension pot, most people then purchase an annuity, although a rule change made in 2011 allowed more people to keep their pension invested and take an income from it through drawdown.

Searching for the best deal across the market for enhanced annuities can make a big difference to your income.

Of those who use the open market option to choose an annuity, 46 per cent receive a significant income uplift by qualifying for an enhanced annuity.

This is compared to less than 5 per cent of those who purchase their annuity with the same company that they saved their pension with, taking out an enhanced annuity.

Determining what to do with your pension pot is an important decision that can affect the rest of your life. People are living longer – according to the 2011 Census, 16% of UK residents – a total of 9.2 million – were aged 65 or over. Retirement is taking up an ever larger chunk of our lives so you should consider all your options carefully – including taking advice – in order to make the right choice.

To make sure you or someone you know makes the right choice why not make use of the Hoskin Independent Annuity Option Service…..

By Debbie Day Hoskin Financial Suffolk

 

Newsletter 10-4-2013

FTSE 100 surges to five-year high in March

In common with many other major equity markets around the world, UK share indices forged ahead during March. Indeed, investors managed to shrug off some anaemic economic data and a downbeat annual Budget statement – not to mention renewed turmoil in the Eurozone as Cyprus narrowly avoided default – to propel the FTSE 100 index to its highest level since

2008.

Overall, the index of the UK’s biggest businesses climbed 0.8% during March and by 8.7% over the first quarter of 2013. Further down the size spectrum, medium-sized companies performed particularly well, with the FTSE 250 index up 5.2% over March  and by 10.7% since the start of the year. Meanwhile, the FTSE SmallCap index posted a monthly increase of 3% and a firstquarter increase of 9.4%.

The financial sector remained under scrutiny during March and the Bank of England ordered several leading UK banks to raise additional capital totalling £25bn by the end of 2013. This move was designed to support lending to the real economy while increasing protection against potential losses that relate to high-risk loan portfolios with exposure to UK commercial real estate and vulnerable eurozone economies.

Meanwhile, according to a report from KPMG , the UK’s leading banks – Barclays, HSBC, Lloyds, RBS and Standard Chartered – generated a 45% increase in core profits during a “dire” 2012;. This profit was, however, wiped out by the cost of “past mistakes” and the revaluation of the banks’ own debt. Nevertheless, the report acknowledged UK banks have “made progress”, adding: “They have strengthened their balance sheets and are becoming better able to carry out their essential function of providing support to businesses and promoting economic growth.”

According to the latest statistics from the Investment Management Association, total funds under management exceeded £700bn for the first time ever during February. Equity funds achieved net retail sales of £940m – their highest level since April 2011 – and equities accounted for four of the top-five best-selling sectors during the month.

In general, demand for UK-oriented equity funds gathered pace during February and in total experienced net inflows of £190m. However, most of these inflows were attributable to the UK Equity Income sector, which was the third-best-selling fund grouping during the month. The UK Smaller Companies sector also experienced modest inflows but the broader UK All Companies sector experienced net outflows and proved to be one of the least popular fund groupings overall.

Paul Hoskin at Hoskin Financial Planning

Newsletter 27-3-2013

BUDGET 2013

IN SUMMARY by Debbie Day at Hoskin Financial Planning:

TAX AVOIDANCE –  HM Revenue & Customs is planning to “name and shame” the promoters of tax avoidance schemes in a fresh crackdown on individuals or companies who do not comply with tax laws.  The Government is due to publish a progress report on its tackling of tax avoidance and evasion this week. It has already set up a ‘general anti-avoidance rule’ with several ‘tax havens’, which will allow the tax authorities to recover money saved by any scheme which is deemed to have been set up simply to avoid tax.

IHT – The Government also confirmed  its intention to freeze the inheritance tax nil rate band at £325,000 until April 2018. They expect approximately 5,000 additional estates per year to become taxpaying estates by 2017/2018 due to this freeze. Therefore, non-abusive inheritance tax planning will become an important requirement for many clients in the years to come.

STATE PENSION – The basic state pension will rise by 2.5% in April, taking it to £110.15 a week.
The Government has also announced it would introduce a single flat-rate pension of £144 a week in 2016.

SINGLE TIER PENSION – The change from separate Basic State Pension and State Second Pension (S2P) to a combined Single Tier Pension will now happen in April 2016, a year earlier than planned. The starting level of pension, for a full 35 year National Insurance record, is £144 per week in 2013 money.

The single tier pension is good news for those being auto-enrolled into workplace pension schemes, as it ensures that it will always pay to save by lifting low income workers off means tested benefits in retirement.

Those who had previously contracted out will have a lower entitlement than £144 to reflect the contracted out pots built up in their personal pensions. But they can rebuild back up to the full £144 by working and paying National Insurance after 2016, and the bringing forward of the launch increases their scope for doing this.

INCOME DRAWDOWN – The Budget has confirmed that 26th March 2013 will be the date when capped income drawdown rates will rise from 100% to 120% of the value of an equivalent annuity.

Furthermore, the Budget confirms that the government has commissioned the Government Actuary’s Department to review the income drawdown tables. This review will look at the assumptions used to provide drawdown rates to “make sure they continue to reflect the annuity market.” Ensuring that drawdown rates remain accurate is to be welcomed as GAD rates have been so low in the past that they have effectively fallen below annuity rates.

CAPITAL GAINS TAX – The annual exemption from tax of any capital gains will increase by 1% a year in 2014-15 and 2015-16, to £11,000 from 6 April, 2014 and £11,100 from 6 April, 2015.

ISA – The stocks and shares ISA limit will  rise to £11,520 and the cash ISA limit  to £5,760 with effect from 6 April 2013.

INCOME TAX – The personal allowance is currently £8,105 and will go up to £9,440 from April this year. But the Chancellor announced today that he is raising the allowance to £10,000 in April next year (one year earlier than expected), which means that almost 3 million of the lowest paid will not pay any income tax.
Longer term we will see higher rate income tax payers are better off – The higher rate income tax threshold will increase by 1% a year in 2014/2015 and 2015/2016. That is below the level of inflation, and is likely to bring another 400,000 taxpayers into the 40% higher rate.

NATIONAL INSURANCE CONTRIBUTION – Every company in the UK is to be able to get up to £2,000 cut from their National Insurance Contributions (NIC), which means that they can hire someone on £22,000, or four people on the minimum wage, and pay no jobs tax. This is intended to help small firms.

CORPORATION TAX –  Corporation tax cut from 23% now to 20% from April 2015.

FUEL DUTY – No increase in fuel duty in September.

ALCOHOL DUTY – Reduction in alcohol duty on beer by 1p a pint as from the budget night  (beer was due to go up by 3p in April). But ‘duty escalator’ to remain in place for wine, cider and spirits.

TOBACCO DUTY – Escalator stays in place – so tax on a packet of cigarettes to go up by inflation +5%.

Debbie Day at Hoskin Financial Planning.

 

Newsletter 27-3-2013

A better deal

The Association of British Insurers (ABI) has introduced a new ‘Code of conduct on retirement choices’ to help individuals secure the best possible deal for their retirement income.

Under the code, insurers now have to write to people approaching retirement to spell out their options. Insurers will have to explain the different ways that retirement income can be taken, including provision for dependants and the possibilities of an enhanced annuity and protection against inflation.

Moreover, insurers are no longer allowed to include annuity application forms in their literature – a move designed to increase the likelihood individuals will shop around.

Some 400,000 people buy an annuity every year yet, according to the ABI, one in four do not believe they fully understand their retirement options, while one in three do not feel informed enough to compare quotes from another annuity provider.

 “Increasing life expectancy means that many people will be receiving a pension for longer than they were paying a mortgage,” commented the ABI.

“The need to make the right decisions at retirement has never been more important.”

Determining what to do with your pension pot is an important decision that can affect the rest of your life. People are living longer – according to the 2011 Census, 16% of UK residents – a total of 9.2 million – were aged 65 or over. Retirement is taking up an ever larger chunk of our lives so you should consider all your options carefully – including taking advice – in order to make the right choice.

Paul Hoskin at Hoskin Financial Planning

 

Newsletter 13-3-2013

Shaking up the pensions system

Following the introduction of automatic enrolment in October 2012, the UK pensions system has received another significant shake-up. In an attempt to address a system most individuals find complex and opaque, the government has announced the introduction of a new, flat-rate state pension, which will be higher than the current state pension.

At present, the basic state pension, which is claimed by some 11.5m people, is £107.45 a week but can be topped up as far as £142.70. The new state pension – which will be introduced no earlier than April 2017 – will be equal to £144 a week in today’s money. All state pension rights accrued under the old system will be recognised, so people will not lose any pension they have earned.

Individuals will have to make 35 years-worth of National Insurance contributions to receive the full amount and will have to accrue a minimum number of qualifying years to be eligible for any state pension at all. The Department for Work & Pensions calculates, by the 2040s, more than four-fifths of people achieving state pensionable age will receive the full flat-rate pension payment.

The government believes at least half of all people reaching state pension age before 2050 are likely to be better off under the new system. Nevertheless, many people will not benefit from the new system, including those who reach state-pensionable age before April 2017 and, while it does improve the ‘safety net’ for British pensioners, it should really only be seen as part of an overall retirement planning.

Hoskin Financial Planning

 

Newsletter 27-2-2013

Have you got more than one Pension?

Many people have 2,3 or maybe 4 different pensions, one with former employers, ones current employer or ones held directly which they pay into.  If this is the case you might want to consider combining your pensions into one pot.

Why?

It is easier to keep an eye on one pension’s performance rather than 2 or 3. A single pension pot is likely to incur less paperwork, administration and therefore maybe lower costs and potential for greater fund performance.  Sound like a no brainer? In theory yes however there are some important issues to consider first.

What do I need to consider?

Most occupational (Work) pension schemes and private (direct) Schemes can be transferred, but there are restrictions and potential pitfalls.  It is not usually worth transferring a final-salary or public-sector pension; the benefits are too good to lose.

Also, it is worth noting that money in your pension can only be transferred from one pension to another (until you have retired), and not every new pension scheme accepts inward transfers.  If your pension pot is very small it may not be worth switching; you will have to pay charges when you transfer and these charges may outweigh the potential gain.

What the Future holds?

The Department of Work and Pensions (DWP) are planning on issuing a consultation paper, examining the consolidation of small pension pots.  Possible approaches could see your pension pot moving with you when you change employers.  This would save the need for further pension transferring in the future.  Further details are expected later in 2013.

What Should I do now?

Think! Transferring and aggregating your pension pots might generate significant long term benefits; however any decision to do so should be taken for the right reasons.  Tread carefully and above all take Independent advice before making an irreversible decision.

Hoskin Financial Planning

Hoskin Workshops

Newsletter 13 – 2 – 2013

Time to review your position

With the end of the tax year fast approaching, now is the time to consider your tax affairs and make sure you take advantage of the allowances available. If you don’t act soon, you will lose the opportunity for good.

There are a number of issues which can, relatively easily, help minimise your liability:

1)     Use your allowances

You get a tax-free allowance for both income and capital gains. Most of these cannot be carried forward, so use them each year as much as you can.

2)     Maximise your pension contributions

You can now get tax relief on pensions contributions of up to 100% of your salary each year (subject to lifetime limits). It is worth making sure you maximise your contributions – and select the right pension or investments – to help ensure a secure retirement.

3)     Consider tax advantageous investments

You get an annual ISA allowance to help reduce your income and capital gains tax bill on investments. This can shelter a whole range of different assets – from secure building society accounts right through to higher risk equities. For those with a significant tolerance for risk, there are also some even more sophisticated schemes available might be of interest.

4)     Plan your inheritance

Inheritance Tax now comes with the ability to pass unused allowances between married and civil partners. If you have not already done so, this is a good time to also look at your plans for beneficiaries and ensure you are making the best of all opportunities now available.

Note: The Financial Services Authority does not regulate tax advice

Until the next time.

Hoskin Financial Planning

Newsletter 27 – 1 – 2013

Financial advice- How it’s changed, why, and what it means for you.

With effect from 01st January 2013 the Financial Services Authority (FSA) Retail Distribution review (RDR) came into effect.   The new rules effect the way financial advice is delivered and how you pay for it.

  1. How you pay for advice.

Advice has never been “free” and in the past financial advisers may have been paid via commission from the provider.   You may not have received an invoice for this but you will have paid for the advice somewhere along the line, such as upfront and/ongoing charges on your investment.

Instead of being paid commission advisers will be required to disclose and agree their charges up front with you.  These charges can still be deducted from the investment products if you prefer, but ongoing charges are only allowed if your financial adviser provides an ongoing service to you.

Hoskin Financial Planning will provide you with an initial consultation at our cost. This helps us to understand your financial objectives and will confirm how we can support you in working towards these. We will also discuss the cost, and levels, of our services both initially and throughout our relationship with you.

  1. Type of advice offered

Advisers will either be independent or restricted, depending on the nature of the advice they provide.

  • Independent advice – will provide advice on products and providers from the whole of the market.
  • Restricted advice – will provide advice on a limited range of products and potentially from a limited range

Importantly either way they will need to tell you.

Hoskin Financial Planning will offer you Independent Advice.Higher Qualifications

Both Independent and restricted financial advisers will have to be qualified to a new higher standard than was required previously.

The new minimum qualification level is set at a QCF level 4, which is equivalent to the first year of an undergraduate degree. Financial advisers will also have to spend a minimum of 35 hours per year studying as part of their continuing professional development.  Adviser’s having meet all of these requirements they will be granted a “Statement of Professional Standing”(SPS) which will  be renewed annually .

Hoskin Financial Advisers have all met QCF level 4 Qualifications and hold valid Statements of Professional Standing.

Kind regards,

Hoskin Financial Planning

 

Newsletter 16 – 1 – 2013

ISA – Use it or lose it

Individual Savings Accounts (Isa) provide a rare opportunity to shelter your money from the taxman.

For every pound you put in, you pay no tax on any capital gains or income earned and do not even have to declare its existence to the taxman. This tax year (2012/13), you can invest up to £11,280. However, the tax year can fly by, so you need to make sure you act early or lose this year’s allowance for good.

Of the £11,280, up to £5,640 can be invested into cash – on deposit with a bank or building society or via cash funds. The rest can be invested in the more volatile world of stocks and shares. You may have good ideas about those companies in which you want to invest, but otherwise collective investments will spread your risk a bit further, giving access to a broader range of companies. That means if one company goes bad, it should not have too detrimental an effect on your overall portfolio.

Isas are available for lump sum investment and also for regular savings. Whatever you choose to do, you need to plan to make sure you can take full advantage. Of course, you do not have to use the whole allowance – but if you can, or if you have investments elsewhere that could be transferred, sheltering them within an Isa provides a more tax-efficient way to invest.

Please note: the exact tax benefits of ISAs vary depending on your circumstances and the assets in which you invest.

Kind regards,

Hoskin Financial Planning

 

Newsletter  2 – 1 – 2013

Making Financial Resolutions

Once again the time of year is upon us when it is commonplace to take stock of various aspects of our lives and make resolutions for the year – and even the decade – ahead. The problem is, too few people extend this to include their finances – and yet that is arguably one of the most important areas to review to ensure you are truly getting the best bang for your buck.

So, we’ve put together the top four financial resolutions for you to be considering as you look forward to 2013.

Resolution 1: Set clear goals

It is imperative to set clear and concise financial goals. Be specific and include actual figures and measurements. I’m sure you’ve heard this many times before, but sometimes the old ones are the best ones.

Resolution 2: Address your debts

Make a list of your debts and arrange them by interest rate. Prioritise paying off those with the highest rate and pay them off first before you start to save. It can be counterproductive to save when your debts are incurring higher interest than any savings might accrue.

Resolution 3: Build your savings

Once your debts are clear, set up a savings plan to ensure you make the most of the money you are putting away. We can help you build a bespoke programme that will ensure you maximise your opportunities with ISAs, pensions and the right investments.

Resolution 4: Review existing plans

Are you paying too much for your life assurance or other protection policies? When was the last time you reviewed your pension plan, will it provide for your retirement? When was the last time you analysed and compared your investments with the marketplace to ensure you maximise performance?

Further information

The New Year is a great time to review every aspect of life and start thinking about how you can improve them. Therefore, if you would like to discuss any of your financial matters in more detail, please do not hesitate to contact us.

In the meantime, happy new year and we look forward to helping you in 2013.

Kind regards,

Hoskin Financial Planning

 

Newsletter 18 – 12 -2012

Season’s Greetings from Hoskin Financial Planning

As the Holiday Season is upon us, we find ourselves reflecting on the past year and on those who have helped to shape our business in a most significant way.

We value our relationship with you and look forward to working with you in the year to come.

We wish you a very happy Christmas and a prosperous New Year.

With very best wishes,

Hoskin Financial Planning.

 

 

Newsletter 12 – 12 – 2012

“Covering your income”

Research has suggested that half the UK population would be penniless within a month if their income dried up!

The research was conducted by insurance giant AXA and found that around 50% of UK adults have very little in savings or investments and would struggle to cope if they were unable to work.

Regardless of whether you are single or you have a small army of dependants, if you are suddenly unable to work, your income disappears.  Yet, while many of us cover our lives to protect our families, our pets, our electrical and white goods, very few take the time to protect our health.

Income protection is an insurance policy that provides you with an income if you are unable to work as a result of accident or illness. Most policies will then pay a regular monthly amount until you have made a full recovery, until retirement age, for a fixed term – or death if earlier.

Income protection can be useful as a supplement to state benefits, as these generally prove insufficient to maintain the lifestyle you are able to enjoy on your current earnings. It is traditionally used to cover your salary and the maximum amount you can insure for will enable you to broadly match the after-tax earnings you would otherwise lose.

Costs vary depending on your circumstances, your medical history, the time for which you defer payments but also on the provider. The more you are covered for, the higher the premium. However, cheaper is not necessarily better and therefore, as with all forms of insurance and protection, it is imperative you read the small print on your income protection policy to ensure you know what is covered.

Finally, it is also essential that you are open about any previous medical conditions, regardless of whether or not you think they are significant. Non-disclosure remains one of the most common reasons for claims being declined by providers and will probably only arise right at the moment you most need the money.

Financial advice is therefore highly recommended to help ensure you find the plan most suitable for you.

Kind regards,

Hoskin Financial Planning

 

 

Newsletter 28 – 11 – 2012

“Your Pathway to a Secure Future”

Financial planning means different things to different people. You might want to reduce your tax liabilities, plan for your child’s education, finance the purchase of your dream home or perhaps secure a decent income for your retirement. Alternatively, you may simply want to make sure your financial position is protected whilst you raise a young family or build up a business.

Planning to succeed

Whatever your needs, getting professional, impartial advice can help you cut through the hype and the jargon and make the right decisions for your situation.

At Hoskin Financial Planning, our advisers are fully qualified and dedicated to providing advice specific to your individual needs. We look to build sound and lasting business relationships with our clients and will help you sort out not just any current issues but also your plans for the future.

Independent advice

As Independent Financial Advisers, we have no ties to any single product provider or supplier. We can therefore research the whole marketplace, which offers thousands of different options, and make sure we recommend only the solutions which are most suitable for you.

Free Consultation

As an introduction to the valuable benefits which independent financial advice can provide, we can offer you a FREE initial consultation, completely without obligation. This would take around an hour and give us the chance to chat about your circumstances and explain more about how we work.

We look forward to speaking to you.

Next Hoskin Workshop Monday 10th December at Chelmsford City Football Club.

Kind regards,

Hoskin Financial Planning

 

Newsletter 14-11-2012

Making a Sacifice.

Previously a director’s perk, salary sacrifice schemes are increasingly offered by employers as a way to mitigate tax pressures and allow employees more flexibility in how they choose to receive their remuneration. Under such arrangements, you can trade part of your salary for benefits, such as pension contributions or even childcare vouchers.

Having part of a salary or bonus paid into a pension scheme has particular tax advantages. If you sacrifice, for example, £100 of gross salary every month and have this paid into your pension scheme, you save tax at your marginal rate plus national insurance (NI) contributions. Salary sacrifice will also benefit the employer, who saves its own NI contributions – and, in rare cases, may even rebate this back to the employee.

The maths for investing in pensions is compelling. Higher-rate taxpayers would get £100 of investment at a net cost of just £59, while lower-rate taxpayers would get the same for just £69. Salary sacrifice might also prove tax efficient for other benefits, because employees receive some at the gross value (subject to the rules over benefits in kind).

However, employees must be careful not commit to a salary cut they cannot sustain. Pensions tie up your contributions until at least the age of 55, which other investments do not. Salary reductions will also have knock-on effects for other assets – for example, mortgage applications, death-in-service benefits and income protection. Finally, you need to ensure your employer’s pension merits an additional investment. If the scheme is weak or inflexible, it may not be worth it.

 

 

Picture from the recent Hoskin Financial Education Workshop held at Benton Hall, Witham, Essex.

Please Click Here to Listen to Paul Hoskin from Hoskin Financial Planning providing an overview of the new pension legislation Auto Enrolment from Benton Hall.

The next Hoskin Workshops event will be on Monday 10th December 2012 at Chelmsford City Football Club. For you convenience you can book on-line at Eventbrite.

Kind Regards,

Hoskin Financial Planning

 

Newsletter 31-10-2012

Celebrity TV Adverts

Automatic Enrolment

The celebrity TV advert asks “Are you in IT”?

Do you know what IT is?  Well, it’s not Information Technology!

The ‘IT’ that the adverts are related to is ‘Automatic Enrolment’ the term used for the new pension legislation introduced at the beginning of this month.

From 1 October 2012, those between 22 and state pensionable age, who earn more than £8,105 a year and who are not already enrolled in a qualifying pension scheme, will be

enrolled in their workplace pension scheme. The worker and the employer will contribute to the scheme unless the worker decides to opt out. Eventually, workers will contribute 4% of earnings and the employer will contribute 3%, with a further 1% in the form of tax relief.

The largest companies will start auto-enrolment first, with the whole process having to be completed by April 2017.

Around 600,000 people are expected to be enrolled by the end of 2012 and as many as 4.3 million by May 2015.

Eventually, all employers and employees will need to be in IT.

Educational Workshop

Monday 12th November 2012. The Hoskin Educational Workshop.

Venue: Benton Hall Golf Club, Witham, CM8 3LH

Time: 6.45 to 8.30am

Cost £10

Details and Booking via Eventbrite.

Any queries please do not hesitate to contact us at.

Hoskin Financial Planning.

 

Newsletter 17-10-2012

Trust the EU to put a price on women’s equality.

For a long time the cost of life insurance has actually been going down.

For years women got lower rates than men because statistically they live longer.

The EU gender directive is about to change all that.

From 21 December 2012 women can no longer be charged less than men just because they’re women.

This means it could cost you up to 15% more for your life insurance if you wait till after 21 December to take it out.

So, if you’re thinking about taking out life cover, there really is no time like the present.

Long-term care

I was asked to join a group discussion on BBC Essex radio this week about elderly care so thought it relevant to include a more detailed look at financial options to help plan to pay for long term care.

The need for long term care can range from simple help for a couple of days a week through to residential care in a full service nursing facility. This costs money and therefore, to fund it, an individual can either use insurance, invest some of their savings, sell their house or perhaps use equity release.

As the market becomes increasingly popular, options are growing. Among the available insurance products are immediate care and deferred care plans, both of which could pay you an assured level of income in exchange for an up front lump sum.

Alternatively, for those who have been building up significant investments, an allocation of those assets between an annuity, investment bonds and/or collective investments may be sufficient to provide the income you require. Leaving some money in the stock market can provide the potential for continued capital growth, although this is a risk as such investments could also go down in value.

For some, however, the only option for funding care might be the equity they have built up in their house. Many sell up completely and using the proceeds to fund an insurance plan. Others consider an equity release product and these have become increasingly popular as a way to use the equity in your house without necessarily having to give up its entire value.

YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Any queries please do not hesitate to contact us.

Hoskin Financial Planning

Newsletter: 3-10-2012

When was the last time you had direct contact from your:

Financial Adviser?
Accountant? or
Commercial Insurance Broker?

These professionals should be working with you to either save you money or help make you money.

How can they help you or your business if you have had little or no contact from them?

At Hoskin Financial Planning we work hand in hand with our clients reviewing and planning financial affairs as a whole, taking into consideration how they interconnect with short, medium and long term goals; dreams and aspirations both personally and financially.

We strongly believe in regular contact and regular reviews of your financial circumstances, to ensure your plans and policies are fit for purpose and meet your needs in the most cost effective way.

If you would like to know more then please visit our website HoskinFinancialPlanning.co.uk or call us 01621 767200.

It is sometimes good to get a second opinion for a comparative reason which we are happy to provide, if you feel you would like to discuss then we are happy to offer you a free initial consultation.

You may not need us right now; however, we would be more than happy to offer advice or help in the future.

We look forward to hearing from you.

Hoskin Financial Planning

 

01621 876030

Mon to Fri - 9am to 5pm

Head Office Hillcrest House 4 Market Hill Maldon, Essex CM9 4PZ

Get In Touch

One of our friendly team will contact you at the earliest opportunity. Usually within 24 hours.

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Copyright © 2012 - 2017 Hoskin Financial Planning – Independent Financial Advisers – Maldon, Essex, England
Hoskin Financial Planning Ltd is registered in England & Wales number 8759448.
Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005.
The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Your home may be repossessed if you do not keep up repayments on your mortgage.