Surviving the Crunch

Monday, March 30th, 2009 | View from the Top | No Comments

Ten Point Checklist to help counter the Credit Crunch

Managing Partner Simon Harris writes:

It depends on where you subscribe, but the current economic difficulties are expected to end somewhere in the next 3 years.

The important point is that all sources report that it WILL end – the Federal Reserve Chairman recently suggested that it may be as soon as the end of 2009. In the light of all published performance indicators this appears optimistic, but if it were true that could lead to a very quick return to positive in the UK thereafter.

In the meantime the majority of people in the UK are waiting for the turnaround, some more concerned about survival than others. Is there anything we can do to improve our circumstances while we wait? This checklist might help to ensure you are in the best position:

1.  Review your savings return.

Most savers have lost out over the past 12 months, but there is no reason to simply accept the rate your current savings institution is offering. There are many ways to invest for a better return, for which seek expert advice from an independent financial adviser.

2.  Can you release equity from your house?

Whether for your own requirements or a family member, it is often possible to release money from your property despite the difficult lending environment. Even if you are not working or have retired there may be a plan to suit you. An independent broker can help further – please resist the temptation to do this on your own as it is now, more than ever before, a specialist field.

3.  Have you made best use of tax allowances?

It is surprising how few people fully utilise the tax allowances available, but then again the information is not always that easy to find or digest. An independent financial adviser can help to ensure that you have used your allowances effectively.

4.  Do you have employment insurance?

Unless you have been notified of redundancy it’s not too late to insure a percentage of your income, protect your mortgage payments or provide a fixed lump sum in the event of redundancy. An independent adviser will find the best policy for your circumstances.

5.  Have you checked your mortgage payments?

Despite the fall in house prices and sales volumes there has been some good news in the falling interest rates for borrowers. There are some excellent savings to be enjoyed, check first with your existing lender to ascertain their best offer and then use an independent broker to compare that to the whole mortgage market for you.

6.  Compare your life insurance.

Rates have fallen over recent years and you may well be able to switch life insurance providers achieving the same (or better) cover for a lower premium.

7.  Review your pension fund.

You may be surprised by the improvements available by changing providers. It is essential to use an independent financial adviser, as pensions can be quite complicated.

8.  Compare your other insurances.

Many people already compare buildings and contents, car, pet and holiday insurances using an Internet comparison website, which often does not present every available option. If you are not doing so, now is a good time to start, or better,  seek help from an independent broker.

9. Are you under notice of redundancy (or feel it’s imminent)?

I. Make sure you know the redundancy procedure at your firm and check that it meets the legal requirements. Try www.direct.gov.uk for more details.

II. Make full use of the £30,000 tax free band for redundancy payments.

III. Consider paying for transitional benefits to be included in your severance package – it may be a lot cheaper that way and buy you some time whilst you look for other work.

IV. Look closely at your pension if funded by your employer – this should also be included in your severance pay and is tax efficient for your employer.

10.  Are you struggling with mortgage or other loan repayments?

I. Never hand back the keys to your house – you will continue to be responsible for the debt and any shortfall after the bank has sold the property. The fees and charges will be significant and lenders will respond more positively to a borrower taking action to address the problem than one who is in denial.

II. Talk to your lender first – whether it’s a secured or unsecured loan you should always contact your lender first to discuss the options that they are prepared to make available to you.

III. Talk to your financial adviser – review your overall financial position with an independent financial adviser, who will introduce you to a debt specialist if appropriate. There may be savings that you have not considered, or different ways to release money from your existing position.

So, in all there are a number of moves you can make to try to keep ahead of things. Many of these points form the basis for an ongoing regime, which your adviser will guide you through as part of your annual review process.

Please telephone 0845 30 50 222 to arrange a free initial appointment.

Tags: Financial News, Interest Rates, Investments, Savings, stock markets

Quantitative Easing – What…?

Thursday, March 26th, 2009 | Financial Digest | No Comments

UK interest rates reached a new low in March as the Bank of England (BoE) cut rates from 1% to 0.5%. The cut, which was widely expected, brings interest rates even closer to zero, reducing the BoE’s scope to boost economic activity through monetary policy.

The news that UK interest rates had fallen yet again triggered renewed concerns about the outlook for savers, who have been badly hit by the dwindling rates on their deposit accounts. The Building Societies Association went so far as to describe March’s rate cut as “a kick in the teeth for savers”, while the Confederation of British Industry criticised the BoE’s ongoing series of rate reductions, describing them as “becoming less and less effective as a means of stimulating the economy”. Lower rates are also likely to renew pressure on sterling, which has already weakened substantially.

In a radical and unprecedented move, the BoE announced that it intends to pump £75 billion into the financial system by buying securities from banks in return for additional credit. Although this measure – known as “quantitative easing” – is sometimes described as “printing money”, no new banknotes are actually produced; nevertheless, because the BoE’s asset purchases are not funded by debt, they should increase the circulation of money in the financial system. Many experts believe that a lack of available credit is a far bigger problem than the cost of borrowing and the BoE is likely to hope that its programme of quantitative easing will help to alleviate this problem.

Tags: Financial News, Interest Rates, Savings, stock markets

How much is your wife worth..?

Thursday, March 12th, 2009 | Financial Digest | No Comments

The value of a Mum in 2009 is £32,812 a year!

One of the major Insurance companies  recently conducted some “Value of a Parent” research to highlight the risk families may face it they don’t have adequate protection in place.

The Value of a Mum is sometimes overlooked when families try to work out their protection needs. Did you know it would cost £631 a week to replace the work the average mum does each week on household chores and childcare! With the protection gap at £2.3 trillion there is an essential need for underinsured families to at least examine the new Value of Parent research and have the facts available to help idenrtify whether there is a problem.

Use our Contact Form to get in touch.

If you’d just like some literature, then we’ll send some. If you’d rather speak to someone on the telephone or face-to-face, then leave us your number and someone will get back to you quickly. Whichever way you want to do things is fine – just make sure you’re not one of those who is under-prepared should the worse happen…

Tags: Family, Insurance, Protection, Value

ISA Matters 2009/2010

Thursday, March 5th, 2009 | Financial Digest | No Comments

After a tough 2008, effective financial planning is more important than ever.

Why not start 2009 by taking full advantage of the tax breaks available to you? Whether your priority is capital preservation, or taking advantage of uncertainty in the markets, now is a good time to think about Individual Savings Accounts (ISAs). You can use your ISA to save cash or invest in stocks and shares. Save cash in an ISA and the interest will be tax freeInvest in shares or funds in an ISA – any capital growth will be tax free and there is no further tax to pay on any dividends you receive. Whatever your views on the market, we will be able to assist you in making the right investment decisions and ensure you make the most of the tax breaks open to you. ISAs are an important part of this as any income or capital gains are completely tax free.

Use it or lose it

The end of the tax year is fast approaching, which means there’s limited time left to use your ISA allowance for 2008/09. You can invest the whole ISA allowance of £7,200 in a Stocks and Shares ISA, or you can split it between a Cash ISA and a Stocks and Shares ISA – for example: £3,600 in a cash ISA and £3,600 in a Stocks and shares ISA. You can’t carry your allowance forward, so if you haven’t made the most of it now is the time to do so.

For the remainder of this tax year Lansdown Place are recommending a number of ISA options which are available to Investors via the Lansdown Place WRAP. This is a new facility that Lansdown Place are delighted to be able to offer to our clients, at its most simple it is a system for enabling you to hold all of your investments in one place, but yet diversifying your holdings between over 1600 collective investment funds. All the funds are available with discounted charges and the WRAP system has the added benefit of requiring minimal paperwork from you to establish your ISA account.

In order to assist you in making a decision of where to place this years ISA allowance I have highlighted some funds and options below, which I hope you will find of interest. We hope that this summary is of interest to you, if you would like to discuss making an ISA contribution in the current tax year then all we ask you to do is to get in touch with us, in order we can organise the investment for you and forward our essential paperwork for your signature and return.

Please note that the stated funds and ISA options below are not recommendations to you; all ISA contracts placed in the current tax year will be done after full consultation with our clients and one of our independent financial advisers

Tags: Investments, ISA, isa allowance 2010, Savings, stock markets