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Planning

Rossmore news: February 2017

A week in the news

  • One in seven businesses is failing to auto-enrol its employees in a workplace pension before the new deadline, new figures from Aviva reveal.
  • An index fund that tracks companies in the FTSE 250 but excludes investment trusts has been launched by Legal & General Investment Management.
  • Coventry for intermediaries has launched new offset mortgages and reduced the rates on some of its buy-to-let products.
  • Scots Widows has scrapped exit fees on all personal pension products.

Thousands of over 55’s lose out from pension freedoms

Hundreds of thousands of vulnerable over-55’s could be left worse off this year if they take advantage of pension freedoms to access cash lump sums, Just has warned. Just Retirement and Partnership said that 2017 would see the highest ever number of people reaching 55, the age at which pension freedoms kick in.


Interest-only ‘prison’ to spur equity release

A flood of interest-only mortgage maturities in 2017 is set to ‘turbo-charge’ the equity release market, with one provider predicting demand will more than double over the year. The FCA has highlighted 2017 to 2018 as the first year in which a large number of interest-only mortgages sold would reach maturity and it estimates that almost half those with such a mortgage will be unable to pay the loan.


Scammers Pose as FSCS

The FSCS has warned consumers to “be on their guard” against an email scam promising a high-value payment. The compensation body said scammers were posing as the FSCS and attempting to entice consumers to provide personal information with the promise of a $5.7m (£4.5m) payment.


Scottish Widows unveils £30m workplace pension investment

Scottish Widows will invest £30m in its workplace pensions business to expand the range of products and services available to its workplace customers.


Cost of cyber crime to rise 40%

Financial services firms will be forced to spend millions more to guard against digital crime this year, as some industry professionals warn more needs to be done to educate businesses of the dangers.

For Financial planners the big risk is that you, or your staff, make an error that leads to a client falling victim to fraud.


What is your State Pension age

Key points from an Age UK document entitled “Later Life in the UK” published in 2016 serve to illustrate just how things have changed and are still changing. With a UK population of 65.3 million:-

  • 6 million people are aged 65 or over
  • Over 1.5 million are aged 85 or over
  • The number of centenarians living in the UK has risen by 72% over the last decade to 14,450 in 2014
  • UK life expectancies at age 65 are 85.9 years for women and 83.4 years for men
  • By 2040, nearly 1 in 4 people will be aged 65 or over
  • The proportion of the population aged over 75 is projected to double in the next 30 years
  • Nearly 1 in 5 people will live to 100, including 29% of people born in 2011.

Pension Contributions by age per £10,000 per annum of retirement income

Current Age State Pension Age Approximate monthly contribution required per £10,000 of income*
20 68 £110
30 68 £165
40 67 £275
50 67 £510

* Contribution assumptions – Level before 20% basic tax relief
* Growth assumptions – Capital growth of 6% net of charges
* Income assumptions – At-retirement gross income before tax: adjusted for 2% inflation; 6% annuity rate; no tax free lump sum taken.

Increasing life expectancy means the State Pension Age goalposts could move even further away in the future, with people working into their 70’s and 80’s to make ends meet.


Conditions re Pension Advice Allowance

Can be used a total of three times, only once in a tax year, allowing people to access retirement advice at different stages of their lives, for example when first choosing a pension or just prior to retirement.

  • Will be available at any age, allowing people of all ages to engage with retirement planning.
  • Can be redeemed against the cost of regulated financial advice, including robo-advice as well as the traditional face-to-face advice.
  • Will be available to holders of defined contribution pensions and hybrid pensions with a defined contribution element, but not defined benefit or final salary type schemes.

Auto enrolment – Review by Department for Work and Pensions

The DWP is conducting a review of auto-enrolment considering three themes, coverage, engagement and contributions.

Coverage – Consideration is being given to changes in the current earnings trigger of £10,000, age criteria and self-employed.

Engagement – Informing individuals that state pensions will not be sufficient in their retirement, employers matching contributions, people have a responsibility to fund their retirement.

Contributions – Rates need to rise above the 8% minimum planned for 2019, learn from the US experience of timing contribution increases with wage rises.

The year ahead: 2016

The guys at Seven Investment Management have pulled together a comprehensive guide to the global economy in 2016. Download the guide now to see the full commentary which includes these highlights:

  • The hope is that this year will be the one where stronger economic data is rewarded with a positive market reaction. Now that the Federal Reserve has increased interest rates, investors will seek positive confirmation of the strength of the US economy, rather than looking for reasons to stay in emergency monetary policy mode.
  • Despite this, most of the rest of the developed world remains in emergency mode – something that should fade throughout 2016. While the central banks of the UK, Japan and Europe aren’t expected to tighten policy in the next twelve months, but they will most likely start talking about it.
  • Markets are going to continue to experience shocks (true in any year), and the violence and speed of these is unlikely to diminish. The current environment is likely to persist – with long periods of tranquillity punctuated by short episodes of extreme volatility.
  • Managing money will be as difficult as ever, and it is going to be more crucial than ever to focus on the long term outcomes. Advisers like Rossmore will keep trying to ignore the surface ripples and instead look for the deeper currents that affect the financial world over years, rather than weeks or days.

So grab a cuppa and take a look at the guide now.

Homehunters still don’t know about Help to Buy

Nearly a quarter of people have no idea what the Help to Buy scheme is, suggest a new report.

Around 22 per cent of the homehunters and homeowners questioned by removals specialists Bishop’s Move said they had never heard of Help to Buy (or had heard the name but didn’t know what it was).

A quarter of those questioned in the North East are still completely in the dark about the scheme compared to seven per cent in Yorkshire – where another 26 per cent were very unclear about how it worked – and six per cent in the West Midlands.

helptobuy

Overall, only three per cent of people said they were fully aware of Help to Buy’s benefits and have used or knew someone that has used the scheme.

Latest government statistics show that the various Help to Buy schemes have enabled 35,000 people to buy their own home since they were launched 14 months ago. The highest numbers of Help to Buy sales have been in Leeds (580), Wiltshire (506), Central Bedfordshire (458), Milton Keynes (417), and Peterborough (379)

“Help to Buy has certainly been making the headlines for some time there are yet pockets of home owners and property buyers across the UK that remain completely unaware of the scheme,” said Chris Marshall, Sales & Marketing Director at Bishop’s Move.

“In order to improve local economies through the housing market, more needs to be done from a regional perspective to ensure people are fully aware of the many benefits Help to Buy can bring.”

Talk to Rossmore about your buying options using the Government sponsored help schemes.

Source: Independent

 

Retirement Planning Guide

With the latest changes to the budget in March, we’d like to offer  a comprehensive planning and retirement guide. To make sure you’re totally clued up on retirement planning, download the guide HERE. Know someone who needs this? Why not share with them also.

Note, this guide is for information only and does not constitute financial advice. Please contact Rossmore Financial Services to review your retirement planning.

ISA notice – End of Tax Year


5th-April 2

End of tax year fast approaching to use current tax year allowance

Not used any of your ISA allowance for the current tax year (2013/14)? Then you have until 5th April 2014 to use it. However, in practice this is in actual fact 3rd or 4th April, as the 5th is a Saturday. Make sure you stay up to speed with our guide to all things ISA…

Download your 2013-2014 ISA guide here.

 

 

The Cost of Cancer

The financial impacts of cancer are not normally something people think of, but the truth is that for many people who get cancer, money is one of their biggest worries.

A cancer diagnosis can change everything. People will often need time off work which could mean a drop in income which in turn could impact the paying of mortgage/rent payments, household bills and daily living expenses.

At the same time, there are additional costs associated with cancer which many people don’t think about, these include:

– Travel costs (trips to and from hospital) – Increased household bills
– Additional clothing costs
– House modifications

At a time when people should be focusing all their energy on fighting cancer, many could be spending their time worrying about money.

Financial worries

Having cancer is expensive. MacMillan conducted some research in Wales and found that more than 50% of people with a cancer diagnosis were worried about their finances and one in four have to cut down on normal household expenditure. One in five people had problems paying their bills, rent or mortgage, and in some extreme cases patients become homeless following diagnosis*.

Loss of income

Loss of income is one of the greatest financial implications for people diagnosed with cancer.

Of those employed at the time of diagnosis, around 15% will have to stop work altogether while three out of 10 will have to change their working status in some way*.

For those who don’t work the impact is also felt. Although they do not experience loss of earnings, the increased costs associated with a cancer diagnosis can take up a large proportion of their fixed and typically low incomes.

And let’s not forget the income of a spouse or partner may also be affected if they need to give up work or reduce their hours to care for a loved one affected by cancer.

Additional costs faced by patients

Travel costs

Getting to and from hospital appointments are an additional cost faced by an estimated 95% of patients*. Cancers such as breast cancer and leukaemia typically require the most number of hospital appointments.

The true value of costs faced by cancer patients is hard to determine as a patient’s journey can differ due to the nature of the cancer treatment and the location of the cancer centre. But the cost of travel can be significant.

There are also car parking costs to consider. Parking charges can be quite expensive and costs can quickly add up.

Clothing costs

Treatments such as chemotherapy can cause substantial weight loss or gain. As a result many people find they need to buy a whole new set of clothes and some need items such as wigs and bandanas. The majority of the expenses are experienced in the first year. An estimated 40% of patients face this cost*.

Increased bills

Household bills can dramatically increase after a diagnosis:

  • Fuel bills can escalate as patients are at home more thanusual and are more likely to feel the cold during treatment.
  • Phone bills can rise as patients need increased socialinteraction to combat isolation and loneliness.
  • Food bills can increase, particularly for patients who need tofollow a special diet.

Patients may also need to buy items that they would never have considered, such as extra-thick duvets, specialist toiletries and particular types of toothbrushes. These inexpensive items can mount up to a significant sum.

Other costs

Additional costs which could also affect some patients are household modifications, childcare costs, and overnight costs.

Stress

All of these additional financial costs can trigger stress. Stress can have a major impact on a cancer patient, resulting in emotional and mental health issues – all of which can affect how long it takes to recover from cancer.

Critical illness cover

Having Critical Illness Cover in place could help ease this financial burden. It could be used to help towards paying bills and other expenses and can help support customers during their treatment, recovery and in some cases, to help them live with their illness.

* Source: Macmillan / Counting the cost of cancer

Rossmore Financial Services can help with identifying your needs, why not get into contact with us? 

Elderly care all sorted?

When the government unveiled its plans for a £72,000 cap on elderly care costs from 2016, ministers were quick to claim they had solved the problem.

The era of huge bills for care, an issue which resulted in tens of thousands of people selling their own homes each year, was over, they said.

But as politicians and campaigners sift through detail it is becoming more and more clear that all is not quite as it seems.

Not everyone will be able to pick up the tab later

One of the measures trumpeted by ministers was the fact that the bill individuals face could be deferred by getting councils to pay for the care and then allowing them to recoup it from an individual’s estate after their death.

This option is already available in some areas, but under the changes every council would have to offer it, they said.

But it has now emerged the option of deferring payments will not be open to wealthier people.

Only those needing residential care who have assets of less than £23,250 (excluding the value of their home) will be able to get their local council to pay the costs.

For example, it means someone with £50,000 in the bank when they enter a care home will have to pay the bills as they come in until that has been reduced to £23,250. Only then will they be able to defer the costs.

Labour peer Lord Lipsey believes this is such a significant loophole that it amounts to a “sabotaging” of the safeguards.

To read more, click HERE.

Source: BBC NEWS 

Promoting protection across the airwaves

av

Helping get the conversation started

When it comes to protection, we know most people like to think ‘it won’t happen to me’ or ‘I don’t need to think about it now’, and we also know that this makes your job that much harder. That’s where our protection partner, Aviva step in.

Aviva’s latest marketing campaign aims to get people really thinking, and talking, about the value of having protection in place. We’re using radio advertising to spread the word, putting family protection firmly on the agenda, creating awareness to help you get the conversation started. You can find out more and listen to the radio adverts here.

You can also visit the Aviva protection hub for a range of tools and support materials to help make those conversations easier.

Finally, don’t forget to follow Aviva on Twitter and LinkedIn for all the latest campaign and adviser news.

 

aviva.co.uk/adviser
Aviva Life Services UK Limited. Registered in England No 2403746. 2 Rougier Street, York, YO90 1UU. Authorised and regulated by the Financial Conduct Authority. Firm Reference Number 145452.

Auto-enrolment staging dates

ppl

With auto-enrolment coming into full swing this year it is important to make sure that if you are an employer, you are prepared. If you’re just getting to grips with auto-enrolment then you can view our presentation, “7 Questions to Help Your Business Prepare”. 

Once you’ve covered the basics, it’s time to start thinking about staging dates.

What are they?

Every employer will have a date from when the automatic enrolment duties come into force for them. This is called an employer’s ‘staging date’. Automatic enrolment is being staged in over a period of six years, which started with the largest employers in 2012.

Staging dates are determined by the size of an employer’s PAYE scheme at 1 April 2012, based on the latest PAYE scheme information from HMRC held by us at that date. The more people in the PAYE scheme at that time, the earlier the staging date. If you use more than one PAYE scheme, your staging date is based on the total number of people in the largest one that you use.*

Can I change my staging dates? 

Yes, you can.

Do bear in mind, you can’t postpone your staging date except in the circumstances described above. However, you can usually bring it forward, for instance to coincide with a convenient accounting period or your pension scheme renewal date.

If you intend to bring forward your staging date, you must notify the Pensions Regulator in writing.*

How can I find out my staging dates?

Learning this information has been made relatively simple with our guide to staging dates. If you’re an employer, this clear and helpful guide is available to download for free HERE

Any further questions, do not hesitate to contact us and we’ll be there to help.

 

*Source: The Pensions Regulator 

Employer’s guide to auto-enrolment pensions

Since being launched October 2012, auto-enrolment pensions are being introduced to businesses all over the UK. Contrary to opposing myths, these changes will affect all employers over the next few years – whether you manage 100 employees or 10. And so it’s important that you know what to expect.

Without the correct, clear guidance, the new auto-enrolment legislation can be onerous for employers. That’s why Rossmore are committed to presenting you with an easy-to-follow approach. Equipped with knowledge and financial expertise, we’ve gathered 7 pivotal questions to guide you through the process and avoid any pitfalls along the way.

[slideshare id=24866920&doc=autoenrolment-7waysyourbusinesscanprepare-130802065742-phpapp01]

 

To download this presentation simply click here and select “Save”.

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