Here is a round up of the Financial Planning news from May 2022, that might be of interest:
Average house prices increased by 12.1% in April which was slightly down on the March figure. The average house price in the UK is now £267,000 – a bit less in Burnley and Pendle! The increases continue to be fuelled by high demand with almost 40% of people saying they were looking to move or would consider moving. The downside is that with higher prices, more people are struggling to meet the mortgage affordability criteria.
HMRC has said it cannot intervene on individual cases for the collection of taxes in so called “pension liberation schemes”. These are cases, often scams, where people draw pension funds before the age of 55, which are then subject to tax rather than being tax free. HMRC says discretion would be too difficult to apply and that victims of such scams must pay the price, in terms of taxation.
The Bank of England raised interest rates by 0.25% to 1%. It was reported that three members of the committee voted for a 0.5% increase, so expect further increase in the future.
The Online Safety Bill will pass into law later this year according to confirmation outlined in the Queens speech.
According to the latest research 44% of people are concerned that their household bills will increase in the next three months and two thirds are concerned that their overall finances have deteriorated already this year.
The government announced its intention to double council tax on unoccupied second homes in order to help to bring them back into the housing market. There are currently almost 250,000 unoccupied second homes in the UK.
The UK’s GDP shrank by 0.1% in March which means that growth over the first quarter of this year is 0.8% which is under the government’s forecast of 1% growth.
HMRC estimate that the number of higher rate tax payers might rise to over 20% by 2045, which would be a doubling since 2011. The reason is because wages are rising and tax thresholds are not being changed to take account of these rises.
Finally, the last piece of Financial Planning news from May 2022, inflation hit a 40 year high of 9%
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