Lifestyle Brokers Commentary

Grim financial forecast for over-50s

Lifestyle Brokers — Thu, 26 Apr 2012 02:48:50 +0000

Around half of today’s over 50s will have to save more and work longer if they want an adequate income in retirement, it has been revealed.
Research from the Pensions Policy Institute examines how much longer today’s over 50s in England might need to work and save to meet target levels of retirement income.
The research has been sponsored by a consortium of Age UK, the Actuarial Profession, Aviva and Partnership.
PPI Director Niki Cleal said: “In the last three decades, life expectancy has increased dramatically in the UK. On the whole this is good news for individuals, but it also means that many people will need to save more and work longer if they want to have an adequate retirement income.
“The research found that the vast majority of the over 50s who are working in 2011 – around 85% – might have sufficient state and private pension income to meet a minimum acceptable standard of living in retirement of £11,000 per annum if they continue to work and save until they are eligible to receive their state pension. However, for many people an income in retirement at this level is unlikely to be considered adequate.”

Millions locked out of property market

Lifestyle Brokers — Thu, 26 Apr 2012 02:47:32 +0000

With UK market conditions continuing to make it difficult for would-be home owners to get a foot on the property ladder, the average age Britons expect to be able to buy their first property is now 37 years old, according research from MoneySupermarket.com.
UK adults who do not currently own a property were asked at what age they expect to be able to buy one, and a staggering 41%, (8 million Britons), claim they do not intend to buy a property at all.
The number of mortgage products available to first-time buyers currently stands at just 1337, a drop of 187 products since this time last year.
Prior to the credit crunch there were 14,940 available in July 2007; underlining how conditions have changed for those trying to get onto the property ladder.
The average loan to value for products available to new buyers is 78% which means someone taking out a mortgage on a £150,000 property for example would need a deposit of £33,000 – well beyond the means of most first-time buyers.

Man City owner ‘in talks’ to buy £10bn stake in RBS

Lifestyle Brokers — Thu, 29 Mar 2012 07:03:28 +0000

Government body UK Financial Investments is in talks to sell £10bn worth of RBS shares to a consortium of investors led by Sheikh Mansour, the owner of Manchester City Football Club.
Earlier this week sources said talks had been ongoing for some time with a number of parties over the sale of part of the government’s stake in RBS.
According to the Financial Times, Abu Dhabi has discussed a £10bn investment into RBS led by Sheikh Mansour, which could kick-start the process of the government’s exit from the bank.
Sheikh Mansour, backed by other Abu Dhabi and Middle Eastern investors, is understood to have indicated his interest in buying part of the British government’s RBS holding.
Mansour is already well known in England, having snapped up Manchester City two years ago. He has turned the club into a force to be reckoned with in the Premiership.
The Sheikh and his partners could invest up to £5bn in RBS shares – potentially equivalent to a 14% stake in the bank. The remainder would be injected as so-called contingent capital, which could convert from debt to equity on the basis of a pre-agreed trigger.

Economic woes force 33 million to put life on hold

Lifestyle Brokers — Thu, 29 Mar 2012 06:53:19 +0000

Two-thirds of Britons (65%) have been forced to put important life decisions on hold due to the current economic climate, research by MoneySupermarket has revealed.

Those aged 18-34, often considered the “prime age” as far as important life changes are concerned, have had to put the most on hold: 17% have put off buying a house (four years on average) and 10% have delayed marrying by an average of three years. In addition, 8% have been forced to postpone having their first child by an average of three years.

The overall top areas people have put on hold are travelling (32%), home improvements (27%) and short-term saving (21%). The average delay to the age of retirement for those that have had to put off retiring is five years.

Price premium for homes close to top schools

Lifestyle Brokers — Thu, 29 Mar 2012 06:51:40 +0000

Property closest to some of the best primary schools in England have reached such a high price premium that buyers can expect to pay up to 42% more than they would for comparable homes nearby.

Some areas show even more extreme valuations. Houses in the catchment area of one Lancashire school sell for £572,500 on average. That is two-and-a-half times the cost of homes in the rest of the region.

The figures, from property website PrimeLocation.com, show just how much parents are prepared to pay to get their children into the best state schools.

Researchers looked at property asking prices in the catchment areas of the top 100 primary schools in England.

They found that homes in these areas had an average asking price of £309,732. This was almost £92,000 more than the UK average of £218,114.

Buy-to-let sector rents and yields still buoyant

Lifestyle Brokers — Tue, 27 Mar 2012 02:09:11 +0000

A 4.8% growth in the average monthly rent led buy-to-let investors across the UK to achieve a rental yield of 6.1% in 2011, according to figures from BM Solutions.

While 2011 rental yields were marginally lower than the previous year (6.2%), they remained buoyed by continued rental increases across the UK.

Increasing optimism over housing market

Lifestyle Brokers — Thu, 22 Mar 2012 06:18:07 +0000

Improvements in consumer sentiment have been identified in the BSA’s latest Property Tracker – but these have been offset by rising fears over job security.

In March, significantly more consumers said that they expected property prices to rise in 2012, 41% of those surveyed compared to 33% in December 2011.
Across the UK, consumers in the South East are the most bullish with 53% forecasting that property prices will go up and 14% saying that they will fall. Those in Wales are the least optimistic on price with a fairly even spread between expectations of an increase (30%), a drop (29%) and no change (22%).

The number of consumers who report that now is a good time to buy is also holding remarkably firm, on a par with the December 2011 figure of 44%. This is better than this time last year when 41% of those surveyed thought market conditions were favourable for purchase.

U.K. Budget 2012 – At a glance

Lifestyle Brokers — Thu, 22 Mar 2012 06:15:25 +0000

Here are the key points announced in this year’s U.K. Budget…

Income Tax
50p top rate of tax cut to 45p from April 2013;
Personal income tax allowance increases to £9205 from April 2013;
Anti-tax avoidance rule introduced.

Pensions
Age-related allowances for pensioners simplified from April 2013 with single personal allowance that ensures no pensioner loses;
Automatic review of state pension age to ensure it keeps pace with increasing lifespans;
New single-tier state pension for future pensioners to be set at about £140 and based on contributions.

Child Benefit
To be reduced by 1% for every £100 earned by a parent over £50,000 and scrapped altogether at £60,000.

Property
7% stamp duty level introduced on purchase of homes worth more than £2million. Homes in this price bracket upwards bought through companies will pay 15% stamp duty;
More financial help for building firms.

Fuel, alcohol and cigarettes
Tobacco duty to rise by 5% above inflation from 6pm – adding 37p to pack of cigarettes;
No change on alcohol duty;
No change to fuel duty plans.

Business
Corporation tax reduced to 24% from April and down to 22% by 2014;
More straightforward tax system for small firms turning over up to £77,000;
Possible enterprise loans for young people to start business.

Commerce
Sunday trading laws relaxed for eight Sundays during Olympics and Paralympics, starting July 22.

Economy
Office for Budget Responsibility revises 2012 UK growth forecast up from 0.7% to 0.8%. 2013 2%, 2014 is 2.7%;
UK inflation forecast to fall from 2.8% this year to 1.9% in 2013;
Borrowing this year to be £126billion;
Unemployment to hit 8.7% later this year before falling to 6.3% by 2016-17.

4.5 million Britons permanently in red

Lifestyle Brokers — Mon, 19 Mar 2012 06:49:01 +0000

Four and a half million Britons are permanently overdrawn and more than 17 million have gone into the red over the last 12 months according to research from comparison site MoneySupermarket.com.

It found that more than a third (35%) have used their overdraft in the last 12 months, with those aged 18-34, (49%) the most common users of an overdraft facility. More than a third surveyed claimed they would cut back on their spending or dip into their savings as a first step to manage their finances, before going into the red.

1 in 5 Britons without savings

Lifestyle Brokers — Mon, 19 Mar 2012 06:43:05 +0000

With many consumers continuing to feel the effects of the wider economic pressures, research by The Co-operative Bank has revealed that one in five Brits (20%) actually have no savings set aside for life’s emergencies.

The findings show that In the event of an emergency, those Brits without savings would rely on other forms of borrowing to make ends meet. Over half (53%) said they would turn to credit cards, while borrowing from friends and family (42%) and using an overdraft (26%) were also popular choices.

Perhaps unsurprisingly young people are the most likely age group to struggle to save, with those under 35 years old three times more likely than adults over 55 years old to have no savings.