On 23rd June, the UK will go to the polls to decide whether or not to remain as part of the EU. At this time the end result would appear to be anybody’s guess. If there is a Brexit, what impact could it have on commercial property investment? Demand might be severely impacted Immigration is undoubtedly one of the hot topics in the Brexit debate. On the one hand there are a number of EU immigrants currently living in the UK, who could potentially (but not definitely) find themselves being required to leave if the UK chooses to exit the EU. On the other hand there are a number of UK nationals living in the EU, who could potentially (but not definitely) be obliged to return home if the UK chooses to exit the EU. From a property-investment perspective, the worst-case scenario would be the EU immigrants being forced to leave without the UK nationals being obliged to return. While this would seem unlikely on the face of it, it could not be completely ruled out since many of the UK nationals living abroad are retirees, who are not competing in the local job market. There could be a flood of property on the market If EU immigrants are obliged to leave the UK then those who are housed in rental property will need to terminate their rental contracts. EU immigrants who are owner-occupiers may choose to sell their property or they may choose to hold onto it and become landlords themselves. This, in and of itself, may not necessarily be bad news. A short-term glut of supply could become a buying opportunity, although it’s always worth remembering that there is a difference between low-priced and a bargain. Investors always need to be looking for quality property with the right features rather than just grabbing properties which are “priced to sell”. There could be a shock to lending Mortgage lending is at the core of the housing market and even those who have sufficient funds to operate purely out of their own funds can find themselves being affected by it. In simple terms, the more relaxed lenders feel, the more likely it is that there will be competition for the best properties since it will be easier for people to buy them with the help of mortgages. Conversely the more anxious lenders feel, the easier it is for cash buyers to build their own portfolios without competition from people who need mortgages. Also, when it is difficult to get a mortgage, people are more likely to rent, if only because they are unable to buy, which creates further demand for rental property. A Brexit could trigger a second independence referendum in Scotland During the independence referendum in 2014, much was made of the fact that an independent Scotland could not consider itself guaranteed membership of the EU. While it is unclear what impact (if any) this ultimately had on people’s voting choices, however many pro-independence commentators in Scotland have argued that it was such an important plank of the “No” campaign that a vote for Brexit should trigger a second referendum in Scotland, particularly if the majority of the people in Scotland vote to remain in the EU, but are, effectively, over-ruled since England has a much more substantial population. This could raise a whole new set of questions relating to a potential new relationship between Scotland and England, which, as a minimum, could create uncertainty in the property market, at least in the short term. As always, however, it’s important to remember that property investment is a long-term game and issues which create short-term volatility or other challenges are generally resolved over time.

The reality of the potential Brexit is that nobody can know what it will mean in practice until it happens (if it happens). In some ways, the result of the referendum may have very little result on financial planning. Regardless of whether or not the result of the vote is to leave or to stay, mortgages will still need to be paid, retirement savings organised and healthcare managed. There are, however, some, perhaps unexpected, ways in which a Brexit could impact your finances, particularly if you travel in Europe. These issues may make little to no difference in terms of the overall economic debate since many of the issues raised will apply equally to people from the EU travelling to or otherwise working with the UK, but they may impact on the finances of particular individuals. 1 - Payment for visas At the moment the EU is technically a superstate without borders. If there is a Brexit then countries may require UK citizens to have visas to pass through their borders. Of course, these visas may be issued for free or for a nominal charge, however UK citizens would still need to be aware of the requirements for them and the need to check for them might impact on transport arrangements, e.g. the requirement to arrive at international train stations in time for checks to be undertaken. 2 – Roaming charges for mobiles/tablets In a similar vein to borderless travel, the EU has regulated charges for travellers who roamed between networks within its borders. This regulation applies to calls, texts and data and essentially aims to minimise the impact of moving across national borders. If the UK were to leave the EU then travellers could find themselves in the same situation as when travelling outside the EU at the moment. 3 – Increased cost for goods from the EU/delivering goods to the EU The EU is a free-trade area, which means that individuals and businesses can send goods (and services) across intra-regional borders without any customs duties being paid. If the UK leaves this free-trade zone then the buying and selling of goods across national borders may become subject to customs charges. In addition to the fees themselves, this may cause the shipment of physical goods to take longer and become more burdensome to the sender and/or recipient, as they may need to manage customs declarations. There may also be the complication of dealing with different sets of legal systems, rather than having one set of pan-EU rules, which, again, may add to costs. 4 – Increased cost for travel insurance At this point, travellers within the EU can access local healthcare services on the same basis as local residents. All that is required for this is an EHIC card (European Health Insurance Card). This reduces the potential liability for travel insurance companies. Again, if the UK withdraws from the EU, it may cease to be possible for travellers to make use of this system which could have an impact on the cost of travel insurance. 5 – Increased cost for using payment cards within the EU Financial institutions which issue payment cards such as Visa and Mastercard, set their own fees and charges, which reflect the costs they pay themselves. At the moment, even though the UK is outside of the Eurozone, it is part of the EU itself and therefore banking and other financial services work on the same free-market basis as other goods and services. In the event of a Brexit, this may mean increased costs for UK financial institutions when they do business in the EU, including when their payment card holders use their cards in EU countries and this may result in higher charges for using cards overseas.

Budget 2016 is now upon us and we can finally see the main budgetary issues for the year ahead. Here are the key points which could affect personal finances. 1 – A New Sugar Tax “Sin” taxes are nothing new with taxes on alcohol and cigarettes having been in place for years. The latest food item to go on the tax “naughty list” is sugary drinks. To be introduced in about two years, there will be two bands depending on the level of sugar in the drink. In England and Wales, the money raised will be used to provide increased funding for sport at primary-school level. The devolved governments in Scotland and NI will decide themselves how the funds raised in their respective jurisdictions will be spent. 2 – Smokers Also Feel the Pinch With a 2% increase on the price of cigarettes and 3% on the price of rolling tobacco, smoking has just become an even more expensive habit. Alcohol however escapes tax increases with freezes across the board on the duty payable on beer, wine and spirits. While the purported aim of this freeze is to help pubs, those who like a tipple of any sort. 3 - Fuel Duty Stays Frozen It has been several years since fuel duty was last raised and so the continuation of the freeze was hardly a surprise. While the biggest beneficiaries are, of course, the heaviest users of fuel, such as transport companies, fuel costs feed into the everyday expenses of people in the street too. Leaving aside the cost of motoring, fuel costs affect how much it costs to transport staple items such as food from A to B and therefore how much is costs in shops. 4 – Sharing Just Got More Attractive There are now two separate allowances (of £1K each) for micropreneurs engaged in trading and/or earning income from property, meaning that individuals could potentially make up to £2K tax-free income from occasional activities such as trading on eBay or letting out driveway space. Of course, these activities would still be subject to all relevant regulations and any local-authority restrictions. It should be noted that the definition of trading is essentially the provision of goods or services, which extends beyond simply running an online micro-business. It could, for example, feasibly cover more traditional business types such as hostess parties and other forms of direct sales. It could also make it possible for those with hobbies to earn some income from their handiwork, e.g. by opening up an etsy shop. 5 – Class 2 NICS Are Mixed At current time, the self-employed are required to pay Class 2 NICS on profits of £5,965 or over and Class 4 NICS on profits of £8,060 or over. As of April 2018, Class 2 NICS will be abolished and Class 4 NICS will be reformed, although the shape of the reform has yet to be made public. This again could be of assistance to those who have an “extra” or “side” income such as those who have a self-employed job in addition to a main job or those who only earn a small amount e.g. by working a small business alongside childcare commitments. 6 – A Premium Tax on Insurers Whether or not this is good news may depend largely on where you live. A premium tax on insurance companies will be used to pay for new flood defences and the improvement of existing ones in England. If insurance companies choose to pass on this cost to customers in the form of higher premiums, then those outside of flood-prone areas will essentially find themselves paying higher insurance costs to protect those in higher-risk areas.

A relevant life plan is an in case of death in service insurance scheme for an employee paid for by the employer.  It is designed to pay out a lump sum should the employee die or be diagnosed with a terminal illness. Should a small business be looking for new high level staff it can be offered as part of a benefits package. It is best suited to Directors wishing to provide their own individual ‘death in service’ benefits without having to take out a scheme for all employees and high-earning employees who’s ‘death in service’ does not form part of their ‘lifetime allowance’ (£1.25 million 2014/15) This scheme is not suited to sole traders or where this is no employee-employer relationship. Tax Benefits The policy has tax benefits for both sides:- Employer benefits: corporation tax relief (so long as the premiums are wholly and exclusively for the purposes of the business); and no National Insurance contributions to pay on the policy payments paid to fund the Relevant Life policy.Employee benefits: no National Insurance contributions to pay on the policy payments paid to fund the Relevant Life policy; the policy payments won’t be taxed as a benefit in kind; and policy payments and benefits don’t count towards annual or lifetime pension allowances.(source https://www.aegon.co.uk/advisers/protection/relevant-life.html) Rules There are a number of rules to qualify as a single person relevant life policy. The policy must only provide a lump sum benefit on death payable before the age of 75. The plan must solely pay out on death and have no serious or critical illness cover included. The plan must not have a surrender value. Any benefit payable from the policy must only be payable to an individual or a charity. The main purpose of the relevant life policy should not be for the avoidance of tax. How much cover can you have? The sum assured with a relevant life policy is similar to that of a death in service package and it is also based on a multiple of reimbursement. For a company director the definition of remuneration is based on salary plus dividends plus bonuses etc. These multiples can vary from provider to provider and depend on the age of the director being insured. Trustees The Relevant Life policy requires the employer to provide a trust for the benefit of the employee’s family. This will help to complete all legal requirements for a Relevant Life policy and also in most cases, it should help to alleviate inheritance tax. How to Get Insured You can obtain a relevant life policy from most UK insurers, however there is no set premium or cover. All things will be taken into consideration such as your occupation, general health and the lifestyle that you lead and these may affect how much an insurer will charge and the terms of the policy. It makes a lot of sense to seek specialist advice when considering relevant life insurance.. An advisor will be able to recommend the best value cover for your specific circumstances and go through the savings you can make when compared to personal cover.

According to the latest research under-40s could face a 148% rise in the cost of retirement living, over-45s also need to be prepared for financial shocks that could change their retirement plans. monthly retirement spending to rise from £1,183 to £2,930 by 2050 (For pensioners who do not rely on state pension) 42% of over-45s have not planned for financial set-backs in retirement Research by Royal London has revealed that today’s 35 year-olds need to have saved at least £666,000 by age 65 in order to secure the same standard of living as today’s pensioners. This is indeed a wake up call created by estimates predicting a 148% increase in retirement living costs by 2050. The research also found that today’s 30-40 year-olds have an average pension pot of £14,000. This represents a significant shortfall on the monthly income that will just cover the basic £1,715 cost of ‘essentials’ (such as transport, housing, food and energy) in 2050. But it’s not all bad news... Despite the above, there is good news, as the research also suggests the younger generation are no worse at planning for their future than those entering retirement today. It states that, 67% of 18-40 year-olds asked said they were saving for retirement (only slightly lower than the 68% of 65-75 year-olds who said they have a pension in place). The younger age group also displayed an awareness of the likely shortfall they could face at retirement, unless they up their pension savings. 57% of those in their 30s, and 51% of those aged 18-29, said they expect to work part-time after they ‘retire’ to supplement their retirement income, while 40% of under-40s predicted that the state pension will be a thing of the past by 2050. ‘Exposed generation’ risks retirement shocks Many current pension savers over 45 could be facing unexpected news in retirement as they too are underprepared. The most commonly-cited potential retirement ‘shocks’ among the over-45s included: Unexpected healthcare costs High inflation rates A stock market crash Falling house prices ‘Bailing out’ children When asked, it became clear that far from being oblivious to the risks 85% of those questioned were indeed worried about increased risks to their retirement dreams in the wake of this year’s pensions reforms. So what can you do about it? You can’t predict the future – but you can prepare for the unexpected. By building a personalised financial plan, and reviewing it regularly, you can take control of your future and give yourself a better chance of enjoying a happy and prosperous retirement that is able to withstand unexpected surprises.

One of the basic rules of thumb of property buying is that you want to be able to put down as big a deposit as you possibly can. One reason for this is that bigger deposits are looked on very favourably by mortgage lenders and can help you to get a better mortgage deal. In fact in the light of the Mortgage Market Review, the size of your deposit might make a difference to whether or not you get a mortgage at all. Help to Buy ISAs were created specifically to help first-time buyers put together that all-important deposit. What is a Help-to-Buy ISA? The term ISA stands for Individual Savings Account. It was originally created to describe a general savings and investment product, which was (and is) available to all adults resident in the UK. The defining feature of a Help-to-Buy ISA is that the government will top up each £200 the saver deposits with £50 additional credit, up to a maximum of £3000. To get the £3000 you would need to save £12,000, giving you a deposit of £15,000. That is per person, so if two (or more) people were to buy together, they could pool their allowances. It's important to understand that you can make a total contribution of £3400 in the first year after opening an ISA and then up to £2400 each year after that until you reach the cap of £12000. This means that you would need a minimum of about four and a half years of saving to receive the full £3000 credit. Who qualifies for a Help-to-Buy ISA? Help-to-Buy ISAs are intended to help adults (in this case defined as people over the age of 16) to buy their first home in the UK. The key words to note here are first and home. Help-to-buy ISAs are only available to first-time buyers who intend to live in the property they purchase. The terms of the scheme explicitly forbid it from being used to purchase a buy-to-let property but there is nothing forbidding it from being used in conjunction with the rent-a-room scheme in which landlords who are resident in a property can receive up to £4,250 per year tax free by letting out furnished accommodation in their main home. It should be noted that this allowance is per property, rather than per person. In other words, if a couple buy a flat together and let out the spare room the £4,250 allowance would be between them rather than each. Are there any catches to Help-to-Buy ISAs? Help-to-Buy ISAs can only be used to purchase a property with a price of up to £250K or £450K in London. That is to say even if the buyer can raise a deposit of more than £18K and/or has sufficient income to make payments on a higher-priced property, they will still only be able to use the funds from their help-to-buy ISA to buy a property up to the permitted price. Whether or not this is an issue in practical terms will depend very much on personal circumstances. Younger first-time buyers looking to buy a starter flat well away from London may find this more than adequate. Older first-time buyers looking for a family home in the Thames Valley area may find it more of a challenge to find something suitable on this kind of budget. It should also be noted that those saving for a deposit have to make a direct choice between a help-to-buy ISA and a normal cash ISA. It is only permitted to open one or the other in any given tax year. General https://www.moneyadviceservice.org.uk/en/articles/a-guide-to-help-to-buy-isas https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/413899/Help_to_Buy_ISA_Guidance.pdf Tax concessions are not guaranteed and may change in the future. We charge a fee of between NIL and 1% of the loan amount. Typically this will be £295. Your home may be repossessed if you do not keep up repayments on your mortgage.

The value of a state pension is set by the government. Currently it is based on the amount of National Insurance contributions retirees have paid during their working life. The value of a private pension pot depends on three basic factors. Firstly, how much money has been saved into it. Secondly, how long the money has been invested. Thirdly, how well the investments have performed. In both the state-run and private schemes, you may be given the opportunity to top up your contributions. If you are in this position, it is important to think carefully about whether or not this is a good choice. The State Pension National Insurance contributions are paid by people in employment (above a certain earnings threshold) and are paid by the government on behalf of those in receipt of certain benefits, e.g. Job Seeker's Allowance. Those who fall outside of these categories, e.g. people who take a gap year from employment but do not claim JSA, can sometimes choose to top up their state pension by paying contributions voluntarily. The first point to note is that you need 35 qualifying years of National Insurance contributions to claim the full new state pension. If you have fulfilled this requirement then regardless of whether or not there are “missing” years, you will still receive the maximum possible amount of state pension. There is a separate scheme which allows anyone who reaches state pension age on or before 5th April 2016 and qualify (this means they are entitled to the Basic State Pension or Additional State Pension and be either a man born before 6/4/1951 or woman born before 6/4/53) to buy up to £25 per week of extra state pension by making a lump sum payment on or before 5th April 2017. This is known as State Pension Top Up. If you have less than 35 years' NI contributions and/or are considering making use of the State Pension Top Up scheme, then there are two key questions to ask before taking a final decision. The first is: how much faith do you have in the long-term future of the state pension? Government schemes and benefits can and do change. Governments might prefer to avoid making changes which lead to state pensioners being worse off, but in theory at least, it is a possibility. The second is: what else could you do with the money? In other words, could you get a better return on investment elsewhere? Private Pensions Private pensions come in two basic forms – workplace pensions and personal pensions. Under current laws, all qualifying employees must be enrolled into a workplace pension unless they actively choose to opt out. Both the employee and the employer make contributions into the employee's pension fund (plus the contributions are eligible for tax relief), these contributions are then invested on the employee's behalf and released to them when they are due to retire. In this case the opportunity for “free money” from an employer does generally make a compelling case for making the most of any workplace pension scheme. As always you would need to ask yourself if you could make better returns elsewhere. If you do find an opportunity where you could feasibly achieve higher returns, the next question to ask would be whether it realistically offers a comparable lack of risk. Personal pensions do not benefit from employer contributions, but the fact that tax relief is available up to a certain level of contributions, means that saving for a pension can be an attractive way of planning financially for retirement. Up until recently, this had to be balanced against the fact that the majority of a pension pot had to be used to buy an annuity. This requirement has, however, been removed as part of a drive towards “pension freedom”. The result it that people currently saving towards a pension can make the most of the “free money” offered by tax relief, while enjoying a much greater degree of flexibility regarding what they can do with the resulting funds. For Pensions we act as introducers only. Info on state pension - https://www.moneyadviceservice.org.uk/en/articles/state-pensions Info on workplace pensions - https://www.moneyadviceservice.org.uk/en/articles/automatic-enrolment-into-a-workplace-pension Info on personal pensions - https://www.moneyadviceservice.org.uk/en/articles/personal-pensions

The NHS is part of the fabric of UK life and yet there is also a thriving private health insurance industry. Why is this and should you be looking at private healthcare insurance for you and your loved ones? Healthcare insurance may give you more control over when you are treated While TV dramas may focus on people being rushed to hospital in ambulances for emergency surgery, the reality is that accident and emergency services are only one part of healthcare. Other forms of treatment can be and are scheduled. Those with insurance may be able to take advantage of their cover to arrange for treatment at the time which is most convenient to them (or at least has the minimum inconvenience) rather than simply having to accept the slot allocated to them by the NHS. Likewise those with healthcare insurance may be able to see a relevant specialist more quickly to have their symptoms and/or concerns assessed. In other words, if there is a need for further medical treatments, this can be identified more promptly. Healthcare insurance may make it possible to access treatment at a more convenient location An obvious example of this is dental treatment. Private dentists may or may not accept NHS patients at all and if they do they may have limited spaces available for them. Having private health cover may make it possible for you to access a private dental clinic near to you rather than having to find the nearest NHS dentist with availability. Having private healthcare insurance may also make it possible for you to access purely private hospitals which do not accept NHS patients at all. Healthcare insurance may give you a higher standard of care By care we mean general care, rather than clinical treatment. As an NHS patient you may find yourself sharing a ward with other people and eating from a menu which is restricted for reasons of practicality rather than for clinical reasons. Having private healthcare insurance may enable you to have a private room and a better choice of food options. It may also mean you get access to amenities such as WiFi while you are in hospital, possibly making it easier to keep in touch with loved ones (or at least stave off the boredom of bed rest). It may even make it possible for you to receive visitors whenever you want, rather than being restricted to designated visiting hours. Healthcare insurance may offer treatment options outside of what the NHS can offer The NHS is designed to cater for essential treatment and to provide essential supporting equipment. The key word here is essential as opposed to simply beneficial. Private healthcare can help to bridge this gap. For example it may pay for extra physiotherapy sessions and/or help to upgrade you to a more comfortable wheelchair until you are ready to walk again. Would you and your loved ones benefit from health insurance? Ask yourself a simple question. If you did not have your health, how would you and your family cope? There are really two aspects to this question. One aspect is practical and in particular financial and the other is emotional. Taking steps to resolve practical issues and to ensure that you and your family are supported financially and can afford whatever you need to help you regain your health as quickly as possible, can go a long way towards mitigating the emotional challenges of dealing with health issues. In addition to private healthcare insurance, you may also want to look at other types of insurance to support you in periods of ill health such as payment protection insurance and critical illness cover. You may also wish to review your life insurance to make sure that those you love are adequately protected from the financial impact of anything happening to you.

With the new year nearly upon us, here are some resolutions to make for 2016 and to keep for the whole year and beyond. Start by looking after your pennies You know the old saying “Look after your pennies and you pounds will take care of themselves.”. It is not entirely true, you do need to manage your pounds too. It is, however, only too true that small expenses here and there can add up to a surprising amount when you actually stop and examine your spending. This in turn can have a long-term effect on your finances. Make some time to look at how you could reduce your spending without much, if any, impact on your lifestyle. For example could you make your own coffee to drink on the train instead of buying it every day? If so, the savings you make can be put to other work. Learn to love budgeting Budgeting essentially means keeping track of your income and expenses and taking steps to ensure that you always have the money you need available when you need it. As a minimum you should have a budget which will see you from one pay day to the next, ideally with some money left over. It can, however, also be helpful to create an annual budget, since some times of year can be noticeably more expensive than others. Christmas is an obvious example of this and, for parents, school holidays can be another. Some people may also have variable income, e.g. those who earn commission and will therefore need to ensure that they save money during their peak earning periods to balance out the times when they earn less. Pay off debts Sadly debts do not go away by themselves. Compound interest is wonderful when it works in your favour (i.e. on your savings), unfortunately it can be brutal when it works against you (i.e. on your debts). Before you get to work on paying off what you owe, you need to have an emergency savings pot set aside. This will essentially act as a buffer to help stop you needing more credit (which you may or may not get). How big this pot needs to be depends on your personal circumstances. As a minimum, think about which of your possessions would cause you the most pain to have to replace at short notice and have a plan (and finance) in place to deal with this worst-case scenario. Realistically you should ideally also have enough money set aside to tide you over in the event that you lost you job. In blunt terms this needs to take into account how long you are likely to need to find another one. With this emergency pot safely set aside, only to be touched if absolutely needed, you then need to start tackling your debts, beginning with the highest-interest ones, such as credit-card balances. Start making financial goals What do you really want to do with your life and how much money will you realistically need to finance your dreams? Saving and investing can seem so much more rewarding when you are undertaking them with a concrete goal in mind. If your goal seems huge, overwhelming even, see if you can break it down into smaller pieces. At the very least try to give yourself little rewards along the way. It can sometimes help to keep track of your progress in a very visible way, such as a physical chart on a wall, where you can tick off each milestone and literally see how you are getting closer and closer to achieving your goal.

Christmas comes but once a year. Sadly its financial effects can be felt for a lot longer. Ideally Christmas should be paid for out of a budget you can afford. This could be through savings you make throughout the year. In reality however it is very easy to overspend at Christmas. If the children have set their heart on something... If there is a great company night out that is just a bit more than you wanted to pay... If you need to travel and miss the more affordable fares... The reality is that after Christmas you may well need to make it a priority to pay off debt. Here are some options for you. Use Christmas to Pay Off Christmas In other words, sell your unwanted gifts. While you are about it, see if you have other stuff you could clear out for cash as well. The obvious place to clear out stuff is eBay. It may, however, be worth thinking about whether this is the best option for you. You may be able to list your item for free, but you can expect to pay fees if the item sells. You are also going to have to be realistic about postage costs and the practicalities of posting items. There is also the possibility of dishonest buyers abusing eBays protection schemes. With that in mind it may be worth looking into alternatives such as Gumtree, Craigslist or local selling sites. You could even try a car-boot or just spread the word and see what happens. Give up Small Temptations (at Least for a While) Small expenses can add up. The cup of coffee bought on the way to work... The shop-bought sandwiches instead of a packed lunch... The takeaway when you are too tired to shop for food... Cutting down on these little expenses can go a long way to boosting your finances. Likewise resist the New Years sales. They might have some genuine bargains, but there are deals all year round for savvy shoppers. You Can Lose Weight Without Joining a Gym Yes Christmas is a time when pounds can easily move from the wallet to the waistline. Yes you may need to lose some weight. No, you do not have to join a gym to do it. In fact now may be the time to ditch the gym membership you never use. It might also be a good time to review your other regular bills and see if you are still getting value for money from them. For example, if your mobile contract is up and you are happy with your handset, then now could be the time to switch to SIM-only or PAYG (Pay As You Go). If you are a smoker, then giving up is a win for your wallet and your health. Get Savvy with Your Shopping Before you reach for a well-known brand, take the time to look at the budget alternatives. Sometimes there will be a difference in quality. You may feel it is worth paying the extra for the premium brand. Other times, however, you may be surprised to discover how little difference there is. You may even find you prefer the budget brand. Switch Nights Out to Nights In Nights out can be great fun, but they can also be very expensive. There is the headline cost of whatever you want to do. Then there are the extras which can sneak in. January may be the perfect time to give yourself a little social down time. Of course, you can still keep up with your friends, just socialize in a budget-friendly way. You may well find that your friends are in the same situation as you. They may be more than happy to have a chance to keep their own costs down.

The topic of retirement savings has had a lot of publicity recently. The introduction of the auto-enrolment scheme was accompanied by a series of adverts highlighting the importance of “saving for my pension”. The withdrawal of the requirement to buy an annuity has also made headlines and sparked plenty of debate. The ability to leave part of a pension fund invested while withdrawing some income from it (known as income drawdown) gives retirees new options for financing their retirement. At least, that is the theory. Those with workplace pensions may find that the reality is somewhat more complicated. Please note prior to taking any action it is extremely important to seek advice on pensions and transferring them before you do so. Workplace pensions – an employers perspective All employers have to comply with the requirements of the auto-enrolment scheme. At this point there is nothing which legally requires employers to run workplace pension schemes which support income drawdown. This means that businesses will look at the matter from a cost/benefit perspective in the same way as other business decisions. Companies which are introducing workplace pension schemes purely because they have to, arguably have little incentive to look beyond the cheapest and/or simplest option which keeps them on the right side of the law. Companies which view workplace pensions as a means to attract and retain staff do have to consider the issue of employee satisfaction, but this has to be balanced against any costs and resources involved. What this means in practice for people currently saving towards a workplace pension For those who currently have some time to go before retirement, it may be far too soon to make a definite decision as to whether or not income drawdown is the right way to go. It may, however, be the perfect time to see whether or not the existing workplace pension scheme supports income drawdown and if not if there are any plans to change it so that it does. If the answer to both questions is no, then it may be worth seeing whether other people would also like this option and if so speaking to management/HR about the matter. What this means in practice for people close to retirement If you're close enough to retirement to have made plans which involve either income drawdown or simply leaving your pension pot invested for some time after your retirement from paid employment, then it can be very helpful to check just how that pension pot is being invested. If the management company is working on the assumption that you are going to be buying an annuity in the near future, they may well be pursuing a different investment strategy for you than they would if they knew that your plan was to keep your pension fund (or part of it) invested over a longer period. It is probably also a good idea to check with whoever is managing your progress towards retirement, what the process is for transferring your pension pot to a provider who does support it and how long it will take. One last and very important point As we mentioned at the start of this article, the changes to income drawdown is new and exciting and has generated a lot of interest. Now everyone over 50 has the option to drawdown their income. For some people it is a superb way to finance retirement. For others, however, annuities or an annuity plus a lump sum may still be the more appropriate options. Either a lump sum or the income from an annuity can be invested however the retiree sees fit. For some people this approach may provide a better balance of flexibility and security. Income Drawdown carries significant investment risk as your future income remains totally dependent on your pension fund performance. The value of your investment and any income from it, could fall or rise and you may not get back the full amount invested.

The mortgage market review led to the introduction of new mortgage rules. In very simple terms these rules obliged lenders to observe stricter mortgage lending practices. Buyers now need to prepared to demonstrate that they are capable of paying back mortgages over the very long term. This includes accounting for possible changes in personal circumstances. It also includes possible changes in interest rates. Realistically speaking any changes to interest rates could only be in one direction – upwards. With this in mind, buyers may like to look at the option of fixing the interest rate on their mortgage. This raises three questions and here are our thoughts on them. Should I get a (new) mortgage at all? If you are currently renting are you sure you are ready and able to buy? You may be able to afford a mortgage, but are you absolutely certain it is the right choice for you in your current situation? Home ownership offers stability, but renting offers flexibility. Which are you likely to find more useful over the next 5+ years? If you are thinking about remortgaging your current home then it is important to understand that the answer to the question “How much can I borrow?” may have changed dramatically since last time. Assuming you can clear this hurdle, you will then need to ensure that you completely understand any and all costs associated with remortgaging your home. For example, do you need to have a new survey done? Then you need to do the sums to see whether or not remortgaging will save you money and if so how much. If switching is only a small gain, then only you can decide if it is worth the effort. Should I look at a fixed-rate mortgage? While fixed-rate mortgages have the obvious attraction of stability, you need to look at your overall situation to decide whether or not they are right for you. Remember that there are three main types of mortgages: repayment, interest-only and offset. With repayment mortgages, you pay off both the sum borrowed and the interest. With interest-only mortgages you only pay off the interest on the loan and it is up to you to find a way to repay the sum borrowed at the end of the loan period. Offset mortgages are essentially massive overdrafts, which allow you to put in and take out money very flexibly. The basic idea is that you give up earning interest on your savings in order to pay less interest on your mortgage, thus gaining overall. In theory any of these options could be offered as fixed-rate. In practice you will need to see what is available on the market at the time you are looking to (re)mortgage. While the idea of fixing your rate may seem attractive, you may find that there are simply better deals out there at the time. How long should I fix my rate for? If you are still in the market for a fixed-rate mortgage, you need to think about how long to fix the rate for. Again, the theoretical answer to this question may be very different to the practical one. While you might want to lock in a low rate for as long as possible, possibly the entire time of your mortgage, banks are businesses, which want to make a profit. With that in mind, you will need to look at each of the available deals and see what the overall cost is (including, for example, any set-up fees). You are also going to need to look at the situation after the fixed period comes to an end. In other words, will you still have a good deal or, realistically, could you find yourself either dealing with a poor mortgage or having to go through the remortgaging process and take the risk of being turned down? Your home may be repossessed if you do not keep up repayments on your mortgage. For Residential & Buy to Let Mortgages, our typically processing fee is £395 and we may receive commission from the lender.