Fairstone Financial Management

26/11/2019

15/11/2019

With 'Help To Buy' ISAs set to end on the 30th November, have a read of Martin Lewis's notes on what they do and why you should open one if you can.......

Never owned a home? Open a Help to Buy ISA – even if you've no savings, just put £1 in. This special ISA – that gives first-time buyers up to £3,000 free towards their first mortgage – closes to new applicants on 30 November 2019, so there's now less than six months left. Yet open one bef...

13/11/2019

IFA

13/11/2019

A sad indictment of modern society........

Most women are not saving enough for retirement and remain at risk of running out of money after they finish work, according to new analysis.

13/11/2019

A big increase in Equity Release lending.

Equity release products provide £988m of funding to over-55 homeowners in Q3, up by 8% from £911m in Q2 33,000...

12/11/2019

Mortgages
Arranging Mortgages
Mortgages come in many shapes and sizes, so it can be complicated and difficult to find the right one to suit your needs or your wider financial planning aspirations. Your Sandringham adviser will work with a range of carefully selective lenders to get you a mortgage which suits you best, and ensure the whole process run smoothly.

There are 2 main types of mortgage:

Repayment
You borrow an agreed amount and repay it on a monthly basis, thus reducing the outstanding amount plus interest. You do this until the total is repaid within the duration (the terms) of the agreement.

Interest only
In this case, you only repay the interest making repayments much cheaper. However, the loan (the capital) amount remains the same and you will need to repay it in full within the duration of the agreement. You will also need to show how you intend to repay the capital.

There are also mortgages available which are a combination of repayment and interest only.

Different types of interest rates
Fixed-rate
With a fixed-rate mortgage your repayments will be the same each month either for the full duration or over a negotiated set period. This type of arrangement is excellent for managing household cash-flow, but may mean you ‘feel’ you’re paying more than you should be, or less than you could be because of shifting interest rates.

Variable rate
A variable rate mortgage means you repay – again on a monthly basis – an amount in line with Bank of England Base Rates. And whilst it’s true base rates have been historically at their lowest for some time now, your repayments could still go up.

Knowledge and expertise
There is so much to consider when making what is likely one of the biggest financial decisions of your life, whether you’re a first-time buyer, moving on, downsizing, or even buying a second home. Plus, there’s the important consideration of what mortgage protection cover you need, in the event of illness or sudden death.

12/11/2019

How do you feel about taking a pension at 75?

Is a state pension age (SPA) of 75 looking more likely?

Recommendation

The SPA should better reflect the longer life expectancies that we now enjoy and be used to support the fiscal balance of the nation. The SPA in the UK is set to rise to 66 by 2020 (Pensions Act 2011), to 67 between 2026 and 2028 (State Pension Act 2014) and to 68 between 2044 and 2046 (State Pension Act 2007). We propose accelerating the SPA increase to 70 by 2028 and then 75 by 2035.

The statement above in the report Ageing Confidently – Supporting an ageing workforce, released in August by the Centre for Social Justice (CSJ), is slightly misleading. A SPA of 68 is pencilled to be phased in between 2037 and 2039. Further legislation will not be introduced until after another SPA review is completed, which, by coincidence, won’t happen until after the next election is due.

The CSJ is not a think tank that regularly makes the headlines, but it does have a high-profile chairman – Iain Duncan Smith, the former Conservative leader and former Secretary of State for Work & Pensions. During that tenure he pushed through some of the SPA increases outlined above. With this in mind, the statement by the CSJ could be interpreted as kite-flying on behalf of the Conservative government, just as the Institute of Public Policy Research (IPPR) plays a similar role for the Labour Party.

The CSJ’s argument for raising SPA with such haste is financially driven. The report notes that at present there are 28.2 pensioners for every 100 people of working age, but by 2050 this is projected to increase to 48 per 100 – almost one pensioner for each two working age members of the population. As the state pension system is funded on a pay-as-you-go basis, that jump has serious consequences even before the impact of rising healthcare costs is considered. Raising SPA to 75 by 2035 would keep the ratio at between 20 and 25 per 100.

Such a steep rise in SPA would be politically problematic as the ongoing protests and resulting court cases about increases in women’s SPA prove. However, the CSJ’s point about whether the current SPAs will continue to be affordable isn’t going away. If nothing else, it’s a reminder that supplementing the state pension with private provision is a surer path to a reliable retirement income.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. The value of tax reliefs depends on your individual circumstances.