Happy New Year..... same old problems 

Wednesday, January 16, 2013 2:58:00 PM Categories: RDR

Happy New Year to all of our clients at Whichers IFA Ltd. We hope you had a great break and enjoyed the festivities.

Hopefully you are all now well aware of the new world we entered on 1st January 2013, which is due to the Retail Distribution Review (RDR). Unfortunately this new world feels like the end of the world at the moment due to the wide range of issues the new changes have brought about. We are working hard to resolve these issues but continue to be open for business.

If you have any questions about RDR or any other areas you would like to discuss please get in touch.

Confidence low for first-time buyers 

Monday, December 17, 2012 11:39:00 AM Categories: Mortgages

One in four prospective first-time buyers believe it will take them at least 10 years to have a deposit in place, a survey has suggested. The report from the Building Societies Association (BSA) said that pessimism in the market remained.

The quarterly property tracker conducted by the BSA found one in five first-time buyers believed they would still be renting or living with family in 2022. It said that before the financial crisis of 2008 hit, 88% of first-time buyers were able to raise a deposit in five years of less, but at the end of 2012 just 62% felt they would be able to save for a deposit in five years.

However, while it said raising a deposit was still the biggest barrier for all UK home buyers, the survey also pointed towards a small improvement in sentiment.

Around 59% of respondents said saving for a deposit was a barrier to buying a property in December, down from 62% in September and 64% in December 2011.

The Autumn statement 

Friday, December 07, 2012 10:42:00 AM Categories: Budget Economy

A summary of the key points

• The Office for Budget Responsibility cut growth forecasts for 2012 down from 0.8% to -0.1%. Next year’s estimate was revised down to 1.2% from 2%.

• Borrowing in the current financial year has been revised lower to around £80bn, thanks mainly to the coupon transfer from the Bank of England’s gilt holdings. It is expected to rise to £99bn in 2013-2014.

• The DMO has announced a cut in the number of Treasury bill auctions of £15bn in the current financial year following the downward revision to borrowing. This has benefitted the short-end of the yield curve, but 30 year yields have risen. This afternoon, 10 year yields are at 1.76%.

• The Chancellor announced a number of fairly significant tax changes: the 3p rise in fuel duty planned for January has been scrapped while corporation tax will be cut in April 2014 from 22% to 21%.

• Mixed news on pensions - the annual tax free allowance will be cut to £40,000 from £50,000 in 2014 while the lifetime allowance will be reduced to £1.25m from £1.5m. However, the capped drawdown limit for pensioners is being increased from 100% to 120%.

• For higher earners, the threshold for paying 40% income tax is being increased by 1% in both 2014 and 2015 but still at a slower pace than inflation. Capital Gains Tax and Inheritance tax exemptions will also be increased by 1%. The basic income tax threshold is to be raised by more than previously announced, to £9,440.

• The Chancellor hopes to raise £5bn over the next six years in tax from undisclosed Swiss bank accounts through a treaty with Switzerland. There were also a number of measures announced designed to combat tax evasion including 2,500 more inspectors.

• The ISA limit will be increased in April to £11,520 while the government plans to consult on allowing investments in small and medium scale enterprises equity markets like AIM to be held directly in ISAs.

• A number of infrastructure investments were announced for road, rail and broadband services.

If you would like to discuss any of these changes please get in touch

UK economic contraction 'less than thought' for 2012 

Tuesday, December 04, 2012 12:58:00 PM Categories: Economy

The British Chambers of Commerce (BCC) has increased its forecast for UK growth for 2012, but still expects the economy to shrink. The UK will shrink by 0.1% this year, less than the 0.4% contraction it had predicted previously, the BCC said. That is "entirely due to the stronger-than-expected" growth in the last quarter, helped by the Olympic Games.

But it now sees growth of 1% for the whole of 2013, down from the 1.2% it had forecast in September.

"As we wait in anticipation for the chancellor to deliver his Autumn Statement tomorrow, our new forecast highlights the challenges still facing the UK economy over the months and years ahead," said John Longworth, director-general of the BCC.

A few points of interest 

Tuesday, November 27, 2012 10:32:00 AM Categories: Economy Europe

A brief roundup of key events over the last few days:

  • Mark Carney has been named as the new governor of the Bank of England by Chancellor George Osborne. Mr Carney, the governor of the Canadian central bank, will serve for five years and will hold new regulatory powers over banks. He was a surprise choice for the head of the UK's central bank and had previously ruled himself out.
  • The UK economy grew by 1% between July and September, official figures have confirmed. The Olympic Games helped to boost growth over the summer. Compared with a year earlier, as opposed to the previous quarter, the economy contracted by 0.1%, whereas the previous estimate had shown flat growth.
  • Eurozone finance ministers and the IMF have reached a deal on an urgently needed bailout for debt-laden Greece. They have agreed to cut debts by 40bn euros ($51bn; £32bn) and have paved the way for releasing the next tranche of bailout loans - some 44bn euros.

Mixed messages about UK businesses 

Tuesday, November 20, 2012 12:37:00 PM Categories: Economy

With the ongoing struggles for UK businesses receiving much press coverage, there have been mixed messages about their future prospects, depending on whether your rose-tinted spectacles are on or not.

According to Business Secretary Vince Cable, there are "reassuring" signs the economy is continuing to recover and there is a "more upbeat mood" among the business community. "In the UK we have had a difficult time, but there are some reassuring figures on job creation, falling unemployment and business start-ups," Mr Cable said.

However, more than one in 10 shops is empty, according to the British Retail Consortium (BRC), the highest since it began collecting data on occupancy levels of High Street premises. The BRC said the town centre vacancy rate of 11.3% was the worst figure since its nationwide survey began in July 2011.

Clearly there are reasons to be optimistic but there may well be more pain for our high streets and businesses before we can be sure things are on the up.

UK inflation back on the up 

Tuesday, November 13, 2012 10:28:00 AM Categories: Economy

The UK's inflation rate as measured by the Consumer Prices Index (CPI) jumped to 2.7% in October, up from 2.2% the month before. The Office for National Statistics (ONS) said the increase was fuelled by education costs, largely because of a sharp rise in university tuition fees. Food prices also rose over the month, with price rises seen in some fresh food, including grapes and bananas.

The Retail Prices Index (RPI) measure of inflation rose to 3.2% from 2.6%.

The Bank of England is charged with keeping inflation close to 2%, something it has struggled to do in recent years as the standard way of suppressing prices is to raise interest rates, which it does not want to risk through this period of weak economic activity.

Alan Clarke, economist at Scotia Bank, said that target remained elusive: "Where do we go from here? Onwards and upwards. Utility bill increases are on their way. We've also got the effect of the US drought and increased food prices to factor in."

A key week for the world's economies 

Monday, November 05, 2012 3:13:00 PM Categories: Economy Europe

According to some analysts, this week is "the most important week of the rest of 2012". A pretty bold statement but with issues in so many countries around the world it's not hard to see why.

Firstly, America has to decide who will be its president for the next four years; then you have the Chinese starting the formal handover to its new leaders; and then you have the central banks of the eurozone and the UK deciding whether they need to do more to support their fragile economies.

In other words, this week will help to determine the long-term economic direction of countries accounting for just over a quarter of global output.

And, as if that wasn't enough, the Greek parliament will also be voting on further budget cuts that will determine whether it can get the next tranche of the European-IMF rescue package.

All in all, quite a busy few days ahead......

UK economy showing optimistic signs 

Monday, October 29, 2012 5:00:00 PM Categories: Economy

There is "reason for some optimism" for the UK economy, the Bank of England's deputy governor Charlie Bean has said. He cautioned against "getting over-excited" after new GDP data showed the recession was over - pointing out the Olympics had given a one-off boost. But Mr Bean said there were "signs of progress" from the eurozone and banking crises and inflation should be lower.

Last week's official gross domestic product figures, which measure the value of everything produced in the country, showed the economy grew by 1.0% in the three months from July to September.

It had been in recession for the previous nine months and has still not recovered the levels of output seen before the financial crisis in 2008.

The end of gender based pricing 

Friday, October 26, 2012 10:13:00 AM Categories: Regulations

The European Court of Justice ruled in March 2011 that insurers cannot price products based on gender following a test case brought by Belgian consumer group Test-Achats which said differential pricing could be interepreted as a form of gender discrimination.

The new rules come into effect on 21 December, when an opt-out clause under the EU gender directive which previously allowed insurers to offer different pricing to men and women will cease.

This change will affect everything from life cover to annuities to car insurance and, if you are considering taking out any of these products now is the time to act.

If you would like further information please get in touch.

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