Article by Christina
May news from your local pension adviser
- It’s been reported that the chancellor is considering making it a legal requirement for pension funds to invest at least 10% of their funds in the UK. In order to boost growth. However, most experts believe that this would be a legal minefield and that they are likely to put pressure on pension funds in other ways. If there are any changes your local pension adviser will be able to keep you up to speed.
- The Advice Show reported that interest in Environmental, Sustainable and Governance (ESG) investment funds had dropped sharply in recent years. This might be because overall they have performed less well than other funds invested in oil, gas and other non-environmental industry. Perhaps suggesting that environmental concerns don’t trump financial performance.
- The Bank of England has just released figures which show that £280 billion in savings are in accounts which offer 0% interest. That’s an increase of £50 billion in the last 12 months. It doesn’t seem right that Banks should be allowed to operate accounts which pay no interest, does it?
- These figures mean that people have missed out on up to £7 billion in interest payments.
- Half of all money spent on advertising in the UK last year was spent on either Google or Facebook. Accounting for over £20 billion.
- So called fin influencers are still causing problems for regulated advice firms with their online content. The latest was claiming 100% mortgages were available at seven-time income borrowing. This type of click bait is a problem being looked at by the FCA, but with £20 billion being spent on advertising there is a mis match in resources.
- Meanwhile Hargreaves Lansdown have had to take down over 600 online adverts using their brand because of a WhatsApp scam claiming to use their brand for an investment group. Please be careful if you see anything on WhatsApp.
- The base rate reduced to 4.25%.
- Unemployment rose to 4.5% in the first quarter of the year.
- But, in better news the UK economy grew by 0.7%. A whole 0.1% more than was expected!
- According to Schroders over 70% of people have no idea how the Inheritance Tax rules work, although 77% know what the tax is.
- By 2030 its estimated that over 150,000 estates a year will face Inheritance Tax (IHT) bills. This is as a direct result of the government bringing pensions into the scope of IHT.
- According to the FCA Financial Lives survey, 10% of people have no savings at all, whilst another 20% have less than £1000 in case of an emergency. 25% admit to having been in financial difficulty and missed payments.
- According to research by Level group, over 50% of people expect to inherit some money from their family in the next 10 to 20 years. 6 million people say that they need the inheritance to avoid going into debt.
Higher taxes for pensioners
- Over 1 million pensioners are now paying the higher rate of 40% tax. That’s double the number back in 2022. In total nearly 9 million pensioners now pay tax. Your local pension adviser might be able to help you save tax.
- On the back of this HMRC issued over 1.3 million tax assessments last year up by 75% on the year before. Three times more than 5 years ago. This is what happens when the tax thresholds don’t change with inflation.
- Inflation increased to 3.5% in April. Up from 2.6% in March.
- Some mortgage lenders increased their rates on the back of this news, despite the earlier reduction base rates.
- 60% of house buyers said that they had been hit by unexpected costs when buying their house. So, it’s not just the mortgage rate you should think about. Other costs listed included repairs, extra moving costs and legal expenses.
- Did you know that over 55’s in the UK own property valued at a staggering £3.7 trillion, according to a local pension adviser, much of which is likely to be used to finance retirement going forwards.
