Client categories: Saver/Investor 

£6bn property funds close the doors

Standard Life, M&G and Aviva have all halted dealings in their commercial property funds because of the prospect of declining property values in the wake of BREXIT, says the Telegraph.  The effect is strongest in London, where demand for offices is expected to fall significantly. Funds have used up a lot of the cash they held, and now have to defer giving money back to investors who want to sell until they can be sure what the real value of property is. 

Client categories: Employee 

Employee pensions may be at risk

The ‘final salary’ pensions of many employees may be at risk, says the Mail, in the  wake of a deal whereby a US company CH2M is transferring  pensions of former employees of engineering firm Halcrow, which CH2M took over, to the Pension Protection Fund. The employees will see cuts of up to 10% in their pension rights even though CH2M is not only solvent but making profits.

Client categories:  Retired 

Lisa’s not so lovely

The ‘Lifetime ISA’ announced by Chancellor George Osborne in the 2016 Budget and which comes into effect next April will not lure young workers away from pension schemes, says the Herald. It cites research by Standard Life showing that employees who contribute to pension schemes get matching employer contributions and can also benefit even more by using ‘salary sacrifice’ schemes, so that they get  higher returns than they would from the Lisa. 

Client categories:  Employee, Retired 

Pensioners catch up with employees

In 2014-15, the average income of pensioners rose to 7% below that of employees, says the Financial Times, drawing on data from the Department of Work & Pensions.   Back in 1994-95 pensioners had average incomes 38% lower than employees, and since then there has been a steady catch-up, but 2014-15 was the first year since the financial crisis that pensioners saw an improvement. The data also shows that the average income of pensioners under 75 is much higher, at £348 per week, than that of older pensioners, whose average income is just £257 per week.

Client categories:   Employee, Retired 

BREXIT could bring big insurance changes

The premiums for many types of insurance could change after BREXIT, says the Financial Times. Travel insurance in Europe could get more costly if reciprocal healthcare agreements are scrapped. The abolition of ‘gender-neutral’ pricing for insurance, introduced in the EU in the face of fierce opposition from the UK insurance industry, would see men paying more for car insurance and women getting lower annuity rates. 

Client categories: Saver/Investor 

Shares to weather the storm

Stock markets have been a roller-coaster since the BREXIT vote, says the Times, but people still have to eat and buy toothpaste and heat their homes. Many of the funds chosen by experts benefit from investing in companies with steady repeat sales. Stockbrokers have also reported a wave of buying of shares by bargain-hunting individual investors.

Client categories: Property Owner 

To fix or not to fix?

Fixed-rate mortgage deals at around 2% for five years were available pre-BREXIT and are still on offer, says the Times. But the question is, will rates go even lower given the Bank of England’s stated intention to support lending, and the likelihood of a cut in interest rates if the economy weakens? Experts have different views but there seems little likelihood of a sharp rise in mortgage rates. On the contrary, if the number of property purchases falls, competition among lenders may increase, leading to even better offers.  

Client categories: Property Owner 

What about property prices?

Property prices in London are most vulnerable post-BREXIT, says the Times, thanks to the big role of foreign buyers. They may be put off by the uncertainties, but on the other hand the fall in the £ has effectively cut prices by about 10%. The rest of the country is likely to be less volatile, mainly because of the strong demand for housing, and the supply of low-cost mortgages is unlikely to dry up. 

Client categories: Parent 

JISAs – best for children?

Though most children do not pay tax, a tax-exempt Junior ISA or JISA is still the best choice for most, says the Telegraph. It’s a way of setting up a long-term savings account (it cannot pay out before age 18) into which all a child’s relatives can put regular or lump sums. Choosing a broadly-based fund investing in shares gives the best prospects for growth provided there’s at least 5 years to go before encashment is likely. 

Client categories: Employee 

Don’t just take the money

Employees approaching retirement should take care with tax-free lump sums, says the Telegraph. Everyone is entitled to take 25% of their fund as tax-free cash, but you don’t have to take it when the pension scheme offers it. If markets are volatile, it may be better to wait and in any case, since you can have the money at any time, it may be better to leave it invested until you need it for a specific purpose.


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