After the market turmoil of the last 2 years it is a surprise that this area did not come under focus sooner, but the solution of a complete ban may turn out to be the proverbial “hammer to crack a nut”.

From a lenders perspective, it makes sense to ensure that a borrower can afford to make the payments on their mortgage and that this income has been legitimately obtained.  If they do not check this affordability then they only have themselves to blame if the loan goes bad. However the change in regulation is proposed by the FSA and not the lenders, who continue to offer self cert mortgages, albeit in reduced numbers, at the time of writing.

It is likely that the new regulations will make it very difficult for lenders to provide creative products for borrowers who have a genuine difficulty in proving all sources of income to the satisfaction of a “lending official”. This will be particularly true if the method of proof is prescribed by Government bodies.

Self Certified mortgages, used correctly, have been a perfectly acceptable method of borrowing; they have been abused by sharp practice amongst mortgage brokers and poor administration by lenders but the risk associated with the reduced paperwork for this type of loan is generally offset by the increased pricing of the product.

There is still time to use the self certification route sensibly and consider other alternatives before legislation forces the point.

Whether you are looking to buy your first home, move house or just ensure that you have the best mortgage deal, my advice is to speak to an independent broker as a matter of urgency to review your options and make a fast decision on what to do before new regulation is implemented.

0845 30 50 222

http://news.bbc.co.uk/1/hi/business/8313853.stm

Investors aged over 50 on 6th October 2009 have an advance opportunity to invest up to £10,200 after that date and counting in  the current tax year.

With stock markets showing signs of recovery and some confidence returning now is a good time to consider investing and making the most of the increased allowance.

For more information and for a free no obligation conversation or meeting please call 0845 30 50 222

Whether it’s appropriate to coin some additional revenue from those with more valuable houses or, indeed, persons with a phone line is hotly debated across the country. The point is more whether the beleaguered UK citizen is suitably prepared in their financial affairs generally, which makes a rise elsewhere easier to absorb.

There is a wealth of information on the web available to DIY-your-finances, but it is often inconsistent or not specific enough to an individuals circumstances.

With Pension reforms around the corner employers and employees alike would be wise to have a Financial “Healthcheck”. You may be surprised how much better off you can be and how quickly you can feel those benefits.

We all know that there is a looming pension crisis in this country and all the major political parties agree that pension reform is essential. In the past decade we have had various initiatives to try and stimulate more pension contributions such as Stakeholder pensions and the 2006 Pension Tax Simplification reforms. There have also been reforms introduced to the State Pension schemes with more to follow.

However, perhaps the biggest and most important reform is just around the corner. The above mentioned initiatives have largely failed to encourage the Great British public to contribute to a pension scheme and so the Government are going to the next obvious step. From April 2012, pension contributions will be compulsory for all employees and employers. For employees who do not have an employer’s pension scheme available to them, a new scheme (largely based on the existing personal pension rules) called Personal Accounts will be introduced to accept their pension contributions. A new body has been formed, PADA (Personal Accounts Delivery Authority), and they will be responsible for delivering this new scheme. However, whilst the topic of Personal Accounts has been the source of most discussion over recent months, I believe that it will be Auto Enrolment that should and will focus most Employers minds.

Under Auto Enrolment rules, employees will be automatically enrolled into a pension plan – it will not matter whether that scheme is a Personal Account, a personal pension or a group personal pension. If the employee does not want to join a pension scheme they will have to elect to ‘opt out’ of pension contributions (this decision will be reviewed periodically with the objective to ultimately auto enrol all employees). If an employee does not elect to opt out the employer will also have to make a pension contribution. It will be the employers’ responsibility to deduct contributions from their employees and make sure the contributions go to the relevant pension scheme and it will also be Employers who are saddled with the task of ensuring that their employees are enrolled or opted out. Not only will they have to find extra revenue to make an employer pension contribution to their employees pension fund, they will also face the prospect of fines and even the threat of a prison sentence if they or their employees breach the rules.

Many employers and business owners will not be aware of any of this, and as these rules will be with us with in 3 years it will have a major impact on their business plans.

If there’s any moral to the tale of Auto Enrolment, it’s seek advice at the earliest opportunity.

Please call us on 0845 30 50 222

Graham Lewis BSC (Hons)

Graham is married with three children, two of whom are teenagers. He graduated from Kings College London in 1990, joining Nat West Life as a Financial Adviser in 1992.  In 2002 Graham moved into the Independent sector as an Independent Financial Adviser.

Graham is an holistic planner, specialising in Personal Investment, Pensions and IHT planning. He carries the Advanced FPC.

In what little spare time he has, Graham enjoys Amatuer Dramatics, and runs a local Youth Club.

Mike Jeffrey

Mike has worked in financial services for 14 years, the past 6 in an advisory capacity, firstly with Lloyds TSB and subsequently as an IFA.

He operates the dual functions of paraplanner and adviser, and will shortly achieve both Chartered Financial Planner under the CII and Certified Financial Planner under the IFP. Mike already holds the certificate, diploma and advanced diploma in financial planning and is an associate of the PFS and IFP.

When not studying, Mike enjoys playing golf, spending time with his wife Rachel and 16 month daughter Neve, cooking and reading. Mike avoids extreme sports.

Robert Pierce

Bob is married with two children aged 25 and 18.

He has previously worked for the same IFA practice for over 31 years.  As a business owner he was subject to take over and merger, the company later becoming a major IFA practice in the UK.   Bob released his equity holding within the company some years ago and moved into a senior management role with very limited client work.  As the company grew and restructuring followed, Bob felt the time was right to return to his first love, that of conducting client work only.

Bob was previously a director of the LIA (the Life Insurance Association), now the Personal Finance Society.  He has also worked a for a major political party in his spare time.

Barry Pearce

Barry is married with two sons, and has been in the Financial Services Industry for over 20 years. He holds the qualifications AFPC, G10, G20, G80, JO5 and MAQ, and has specialised in Retirement and Redundancy planning. Barry has also been working extensively in the areas of Inheritance Tax Planning and Wealth Management, and as such will play a valuable part in the future of Lansdown Place.

Alison Hill

Alison is married with a son (2) and daughter (4) and has 17 years experience in the Financial Services Industry. She holds the full ACII qualifications, including the specialist pension transfer examination, together with CF9, G60, K10 and K20. Alison has previously managed her own consultancy practice, providing advice and support to IFA businesses, before deciding to join Lansdown Place.

To speak to any of our team please telephone 0845 30 50 222

Build an emergency fund

Holding three months’ income in readily available funds will provide some breathing space in the event of redundancy. This should be in an instant access savings account or ISA but do check the small print – banks frequently penalise savers for taking money out of a savings account through loss of interest. An emergency fund is particularly important for families where there is only one breadwinner.

Assess your outgoings

Keeping track of expenditure can highlight potential problem areas. You may find you have old direct debits for things you no longer need – insurance payments on long obsolete mobile phones, for example. See if you can switch to cheaper utility providers, better value car insurance or credit cards with lower interest rates. Set a budget and then make sure you stick to it.

Pay off debt where possible

Reducing debt can significantly cut your monthly outgoings. Start with the most expensive debt first, which is likely to be credit and store cards. Banks will also charge heavily for overdrafts, even when they are arranged, and personal loans can be cheaper. It is worth checking the rates for all debt and, if you can’t pay it off, switching to cheaper types of debt. Mortgages will usually be the cheapest debt – so although it is worth paying down mortgage debt, it should be a lower priority than unsecured debts.

Delay large purchases

This is not the time to start a kitchen refurbishment or loft conversion. Keep new purchases to a minimum and consider putting planned expenditure on hold. With house prices falling, refurbishment may not add value the way it did only a couple of years ago.

Check your insurance situation

Unemployment cover can be bought on its own or with policies such as income protection, and protects in the event of longer-term unemployment. The cost will vary depending on when the payments kick in and the level of income needed. Insurers have policies in place to ensure that people don’t take it out in the knowledge they may be made redundant imminently. There is usually a qualifying period and the insurer will not provide a policy if there is already a specific risk to the policyholder’s job.

WORRIED ABOUT REDUNDANCY?

If the worst happens and you do lose your job

Check your financial rights

Everyone is entitled to statutory redundancy, even if the company goes bust. For those who have been employed for more than two years, this is one week’s pay (subject to a statutory maximum – currently £350 per week) for every year of employment. For those over 41, this increases to 1.5 weeks pay for each year, subject to the same statutory maximum. Some companies will pay out more than statutory redundancy.

Check your employment rights

Companies need to follow the proper procedure when making someone redundant and, if they do not, you may have reason to claim for unfair dismissal.

Check what you are entitled to from the Government

Claiming benefits is not a long-term solution, but can offer a temporary respite.

Invest any lump sum wisely

While it is tempting to dip into capital for living expenses, it may be worth investing a lump sum to generate an income. While this may be less than you are used to, it will provide some breathing space to find alternative employment. Alternatively, use the sum to pay down debt and reduce your outgoings.

Maximise your tax benefits

Statutory redundancy payments are tax-free and a total of £30,000 paid on termination can be tax free. The remainder can also be free of tax if it is moved into a pension. This is a suitable option for those nearing retirement. A lump sum of 25% of a pension pot can be taken as a lump sum from 55, so it may only mean tying the money up for a few years.

Ensure you claim any insurance entitlement

It may sound obvious, but it is time to dust down the files and root out any insurance policies you may have forgotten about. Unemployment insurance and income protection will kick in after a certain number of months, depending on the policy. Payment protection insurance has proved poor value, but if you already have historic policies in place, you may also be able to claim.

Look at your mortgage repayments

You may have a number of options depending on the flexibility of your mortgage and it may be possible to take a payment holiday. This will either lengthen the term of your mortgage or increase your payments when they resume, but can give you up to a year with no mortgage repayments. You may also be able to reduce repayments by changing the length of the mortgage or switching to interest-only.

Consider alternative sources of income

Could you rent out a room in your house perhaps ? Under the rent-a-room scheme, you can earn £4,250 per year tax-free. Also, you may be able to take short-term, part-time jobs or raid the attic for things to auction.

Call us for help on 0845 30 50 333