Out and About in the Financial World
Welcome to our newsletter sharing items that we feel may be of interest to you, our clients, as well as your family and friends.
If you read anything of interest and we can be of further help please don’t hesitate to give us a call.
Record low rates in September 21
While the stamp duty holiday is being phased out, buoyant activity in the housing market is expected to continue. That’s because homebuyers can still benefit from reduced stamp duty rates until October when they will finally revert to normal. As a result lenders are competing for your business by offering very low rates.
When it comes to remortgaging it’s always important to consider the full picture, including all the costs involved, such as arrangement fees. It’s a good idea to speak to a broker who can talk you through the process and the costs involved and help you find the best deal for you.
The competitive pressure is feeding through into all areas of the market, including for borrowers with small deposits and those who want to fix for five years or more.
Source: Home Owners Alliance August 2021
We suggest you review your current mortgage to see if a new arrangement could save you money.
Give us a call.
Government to correct women’s underpaid state pensions
The issue of the missing state pension benefits affects women who were married and reached state pension age (SPA) before April 2016, who can claim the basic state pension.
Six groups of women may have been underpaid:
-
Married women whose husband turned 65 before 17 March 2008 – if they never claimed an uplift to the 60% rate.
-
Widows whose pension was not increased when their husband died.
-
Widows whose pension is now correct, but who think they may have been underpaid while their late husband was still alive.
-
Over-80s – who are receiving a basic pension of less than £82.56.
-
Widowers and heirs of married women – where the woman has now died, but who was underpaid state pension during her life.
- Divorced women who are not benefiting from the contributions of their ex-husband.
Women who have been affected won’t need to notify the DWP. However, even though you don’t need to do anything to claim back your cash, you can still check if you’re owed money by using LCP’s dedicated calculator.
To read more and use the calculator visit:
Risk vs Return
We were fascinated to see a table in Defaqto’s DFM Market Update 2021 which we reproduce below.
To explain, a DFM is a discretionary fund manager who looks after the investment of money for clients of advisors, or directly. They provide two types of investment – bespoke or MPS (managed portfolio services) – the table relates to the latter and shows results for the 5 years ending 31 December 2020.
Two things stand out for us – the first is the demonstrable historic correlation between risk and reward, and the second is the wide range of results between DFM’s from good to less good – some even losing money in lower risk categories. Even allowing for the relatively short time in investment terms of 5 years, the unusual last 5 years with the impact of Covid and Brexit, and the standard warning that past performance is no guarantee of future returns the message is that some degree of risk is necessary to find good returns.
You should always take advice before selecting any investment and should consider the length of time you wish to invest for, together with how much risk and volatility is comfortable for you.
As advisers it is our job to find our clients a DFM who is at the top end of historic performance results, and who offers competitive pricing like ours.
|
Defaqto Risk Rating |
Average annualised return – 5 years % |
Total return – 5 years % |
Total return – low % |
Total return – high |
|
2 |
2.75 |
14.76 |
-2.43 |
31.94 |
|
3 |
4.53 |
25.00 |
-6.14 |
37 .59 |
|
4 |
5.52 |
30.99 |
-9.24 |
46.48 |
|
5 |
6.59 |
37 .82 |
-0.64 |
55.35 |
|
6 |
7 .48 |
43.73 |
9.91 |
62.05 |
|
7 |
8.62 |
51.53 |
20.49 |
82.14 |
|
8 |
10.24 |
63.29 |
23.22 |
85.17 |
|
9 |
10.79 |
67.06 |
56.52 |
91.15 |
|
10 |
12.24 |
78.31 |
66.68 |
97.47 |
MPS portfolio risk vs return (Performance to 31 December 2020)
Marriage Tax Allowance
If you’re married or in a civil partnership, you may be entitled to a £1,260 tax break called the marriage tax allowance – something 2.4 million qualifying couples miss out on.
If your claim is successful, it will lower the higher earner’s tax bill for the tax year, but you can also backdate your claim if eligible.
How it works
Marriage Allowance lets you transfer £1,260 of your Personal Allowance to your husband, wife or civil partner. This reduces their tax by up to £252 in the tax year (6 April to 5 April the next year).
Who can apply
You can benefit from Marriage Allowance if all the following apply:
- you’re married or in a civil partnership
- you do not pay Income Tax or your income is below your Personal Allowance (usually £12,570)
- your partner pays Income Tax at the basic rate, which usually means their income is between £12,571 and £50,270
You cannot claim Marriage Allowance if you’re living together but you’re not married or in a civil partnership.
Backdating your claim
You can backdate your claim to include any tax year since 5 April 2017 that you were eligible for Marriage Allowance.
Your partner’s tax bill will be reduced depending on the Personal Allowance rate for the years you’re backdating.
For more information go to https://www.gov.uk/marriage- allowance