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Agent Million visits London and Dorset this October

Summer travels may be over, however NS&I’s Agents Million continue their tours, spreading
news of £1 million jackpot wins to two lucky Premium Bond holders in London and Dorset.

October’s first jackpot winner, a man from Inner London, becomes the 51st jackpot winner in
the whole of London. His winning Bond was purchased in February 2016 when he
purchased the maximum investment of £50,000 (Bond number: 267FW537456).

Another man, this time from Dorset, has also hit the jackpot, winning the £1 million from a
£25 prize that was won in October 2010’s draw and reinvested into his total Premium Bonds
holding (Bond number: 173HT264915). He has £19,725 invested and becomes the ninth
jackpot winner in the county since the jackpot was introduced in 1994.  Agent Million last
visited the region in April 2018.

The pair become the 395th and 396th winners of the £1 million jackpot prize.

Jill Waters, Retail Director at NS&I, said:
“Re-investing Premium Bond prizes can be a great way of saving and it has paid off this
month for Dorset’s jackpot winner, scooping the £1 million jackpot from a £25 reinvested
prize. While the London winners’ savings habit has proved particularly fruitful, winning the
top prize just over two and a half years after investing.”

Customers can opt to have their prizes paid directly into their bank account, or to have their
prizes automatically reinvested into their Premium Bonds account, as long as the total
holding is below the maximum threshold of £50,000. More information about these options is
available on nsandi.com.

Do you have an unclaimed prize?
There are over 1.5 million unclaimed prizes worth just over £60 million.
In Inner London, there are over 119,000 unclaimed prizes worth nearly £4.8 million. These
prizes date back to June 1960, with a prize of £100. The highest unclaimed prize in the
region is £50,000, having been won in May 2016. The customer has £9,175 invested in
Premium Bonds and the winning Bond number is 33XT435809. There is also one £25,000
prize and four prizes of £10,000 waiting to be claimed.

In Dorset, there are over 18,000 unclaimed prizes worth £672,000. These prizes date back
to February 1964 with a prize of £25. There are also 17 prizes worth £1,000 each in the
region, with seven of these being won by customers with less than £10 invested in Premium
Bonds.

October 2018 prize draw breakdown

Value of prize & number of prizes

£1,00,000  – 2
£100,000 – 5
£50,000 – 10
£25,000 – 20
£10,000 – 49
£5,000 – 99
£1,000 – 1,795
£500 – 5,385
£100 – 24,622
£50 – 24,622
£25 – 3,083,096

Total prize fund value
£89,743,200
Total number of prizes
3,139,705

In the October 2018 draw, a total of 3,139,705 prizes worth £89,743,200 will be paid out.
There were 76,922,736,910 eligible Bonds for the draw.

Since the first draw in June 1957, ERNIE has drawn 416 million winning prizes, to the value of around
£18.7 billion.

Customers can find out if they have been successful in this month’s draw by downloading
the prize checker app for free from the App Store or Google Play, or visit the prize checker
at nsandi.com. The results are published in full on Tuesday 2 October.

Some Premium Bond Facts

1. All Premium Bonds prizes are free of UK Income Tax and Capital Gains Tax.
2. NS&I is one of the largest savings organisations in the UK, offering a range of
savings and investments to 25 million customers. All products offer 100% capital
security, because NS&I is backed by HM Treasury.
3. The annual Premium Bonds prize fund rate is currently 1.40% and the odds of each
individual Bond number winning any prize are 24,500 to 1.
4. Customers can buy Premium Bonds online at nsandi.com and over the phone by
calling 08085 007 007. This is a freephone number and calls to it from the UK are
free from both landlines and mobiles. Calls may be recorded. Customers can also
buy by post. Existing customers can also buy by bank transfer and standing order
and each investment must be at least £50 for bank transfers and standing orders.
5. Further information on NS&I, including press releases and product information, is
available on the website at nsandi.com. Follow us on Twitter: @nsandi or join the
conversation on Facebook: Premium Bonds made by ERNIE

are children’s pensions as good as they seem?

Pensions for children? Surely that’s taking planning ahead to a whole new level?

Nonetheless, if you can afford it, putting money aside in to a pension for your children or grandchildren can be a sensible option.

Under the current rules, you can put £2,880 a year into a junior self-invested personal pension (SIPP) or stakeholder pension, on their behalf. Even though the child won’t be a taxpayer, 20% is added to the amount in tax relief, up to £3,600 per annum. If you think about it, that can result in quite a significant amount over the years, taking compound growth into consideration.

The idea of contributing to a pension may tie in well with your sense of responsibility towards the next generation. You may feel sorry for the youngsters of today with their university fees to pay back and a seemingly impossible property ladder to climb.

However, on the downside a children’s pension can be quite frustrating for the recipient. The money is tied up until their mid fifties. This means that although the amount is steadily growing with no temptation to dip into it, it may not be much consolation for a twenty-five year old desperately trying to find the deposit for a house. Instead of making their financial future easier, you may have, in fact, impeded it.

There are other alternatives which will also give you the benefit of compound growth and help you to maximise tax relief, such as using our own ISA allowances and then gifting the money later. These may have more direct impact if the money is to help pay for a wedding, repay a student loan or enable them to buy a house or start a business.

Pension contributions are often referred to as ‘free money’ because of the the tax relief. In addition, 25% of the lump sum when the recipient comes to take their pension is tax free but it is equally important to remember that 75% of any withdrawals will be taxable. Another consideration is that children’s pensions have the lowest rate of tax relief but once in employment, your children may be higher rate taxpayers so would have benefited from higher rate relief.

One thing is for sure and that is that the rules around pensions and withdrawal rates are frequently changing. Given the extended timeframe involved, it’s likely that the regulations around accessing a pension pot will have altered considerably by the time a child of today reaches pension age. Their fund will have had time to grow handsomely, though. As with most things, it all comes down to a question of personal preference for you and your family.

Sources
https://www.ftadviser.com/pensions/2018/05/09/danger-of-children-s-pensions-laid-bare/
https://www.bestinvest.co.uk/news/are-pensions-for-children-bonkers-or-brilliant
https://www.moneywise.co.uk/pensions/managing-your-pension/start-pension-your-child

financial planning in your forties

It’s well known life begins at forty. Doesn’t it?

It should be an exciting decade, full of plans and aspirations. It’s also likely to be a time of optimum earning potential.

What’s more, it’s a crucial decade to take a step back and make sure your finances are on track to meet your goals.

There’ll be some decisions you’ll already have taken in your twenties or thirties, which will have had an impact. You may have bought your own home, for example, or put some savings away in cash, investments or pensions.

If things don’t look quite as rosy as you’d hoped, though, your forties are a good time to take stock, as there’s still time to make adjustments and give your investments time to grow.

Don’t forget, whatever savings you can make now will enable you to pursue your dreams later on.

Here are four key tips for shrewd financial planning at this important time of life.

Budget ruthlessly

Just because life may feel comfortable with regular pay rises and bonuses don’t fall into the temptation of spending more than you need. Do you really need that Costa coffee or M&S lunch every day?

Apps like Money Dashboard or Moneyhub can be helpful in showing you where your money’s going. Simple steps like cancelling subscriptions or switching bill providers can make a significant difference.

Historic studies show that investments usually outperform cash savings so any disposable income you can invest will be beneficial. If you can put money aside in a pension you’ll also be taking advantage of the tax relief available. Make sure you use your ISA allowance too for more accessible funds.

Carry out a protection audit

Think about what if the unexpected happened. Your forties are a time of life where you may find yourself part of what’s known as ‘the sandwich generation’ i.e. caring for elderly parents at the same time as looking after young children. This can put extra pressure on you. Make sure you’re protected should the worst happen by ensuring you have a good emergency fund in place. Also think about critical illness cover and life insurance.

Property plans

Your home will be a fundamental part of your financial planning at this time of life. If you feel you need a larger property, these are likely to be your peak earning years so now is the time to secure the best mortgage you can and find your dream home. On the other hand, if you’re quite happy where you are, it may be a good time to remortgage to get a better deal.

Family spending

Everyone’s situation is different. You may have children at university or you may still be having to pay for nursery fees. Whatever your position, make sure you budget accordingly and allow for inflation, especially if you’re paying private school fees. Work out the priorities for your family – the best education now or a house deposit in the future. It’s important not to derail your own life savings for the sake of your children as no one will benefit in the long run.

By doing some sound financial planning now, you’ll have more hope of continuing in the style you want to live, well beyond your forties.

Sources
https://www.telegraph.co.uk/money/smart-life-saving-for-the-future/financial-advice-in-your-forties/?utm_campaign=tmgspk_plr_2144_AqvZbbk8gXHK&plr=1&utm_content=2144&utm_source=tmgspk&WT.mc_id=tmgspk_plr_2144_AqvZbbk8gXHK&utm_medi

explaining fund charges and investment fees

If you hold any investments or already work with a financial adviser then it’s likely that you are familiar with the fees you pay to invest or receive advice.

But what are these fees and why are they so important to keep a handle on?  This video gives you information on what fees you might be charged and why  you should keep track of them.

where to holiday with a weak pound?

 

If you are heading abroad in the near future, chances are you will be travelling to an E.U. country. 63% of us hope to travel to Europe in the next 12 months, making it by far the most popular destination for British holidaymakers.

However, in the run up to ‘Brexit day’ next March, the affordability of holidaying in Europe remains uncertain… Those of us who’ve visited the continent since the referendum will have already noticed that they are getting a lot less bang for their buck than previously.

As of yet we have very little information on how Brexit will look. With a ‘no-deal’ Brexit looking increasingly likely, it is possible that the pound will remain turbulent until it becomes clear how Brexit is going to pan out.

Ultimately, it is this which will determine whether or not the pound remains weak against the Euro – something that will have a large effect on how our future holidays feel.

In light of all this dreary information, looking outside of the eurozone for your future holidays may be your best bet for your wallet.

This is because the pound has not fallen equally against all currencies. In fact, it has actually gained against some. These countries are generally long haul destinations, although there are a few closer to home.

For instance, since Brexit, the notoriously flukey Argentine peso has fallen 72% against the pound. So, if you want a really good value holiday, your best bet is a 14 hour flight to Buenos Aires.

For those of you who prefer culture and history to warm seas and white sand, Russia should be on your agenda. E.U. and American sanctions have hit the Russian economy hard since part of their Army “accidentally” invaded Ukraine in 2014.

This has meant Sterling has gained 13% on the Ruble, excellent for those of you who don’t mind swapping St Petersburg for Santorini.

Closer to home – but equally lacking in quality sunbathing – Iceland is significantly cheaper than it was a year ago: The Icelandic krona has fallen by 11% on the pound.

Traditionally pricey Switzerland is also cheaper than usual. The Swiss franc is 7% weaker than it was a year ago. If skiing is your thing, the sliding franc makes Switzerland a viable option.

Unfortunately, landlocked Switzerland and freezing Russia and Iceland have very little to offer those of you who want a beach holiday.

Luckily, the pound has risen by 10% on the Indian rupee, so the sandy beaches of Goa and Kerala are an affordable option. What’s more, the Brazilian real is 18% weaker than it was last year. So, for those of you hankering for warmer climes, these may be your best bet.

Sources
https://www.telegraph.co.uk/travel/news/brexit-two-years-pound-holiday-money/

How Will Brexit Affect My Holidays?

interest rate rise: what does this mean?

goldfish jumping from small bowl to big bowlThe Bank of England has raised interest rates from 0.5% to 0.75%, only the second rise in a decade. Currently, interest rates stand at their highest since 2009 and reflect what the Bank of England perceive as a general pick-up in the economy.

The Bank said that a rise in household spending has strengthened the British economy. Economic growth for the year is predicted to be 1.4% this year and the unemployment rate is expected to fall further below 4.2%, where it currently stands.

How does the rise affect you?
If you are on a variable rate ‘tracker’ mortgage, your repayments will increase. For example, if you have a £100,000 mortgage, this will add £12 to your monthly repayments.

It’s important to highlight that if you are on a fixed rate mortgage, your payments will stay the same until your base rate comes up for renewal. The Bank of England’s announcement does not mean that your rates immediately rise.

For prospective borrowers, the interest rate rise signals a change in the Bank of England’s tone. Further rate rises are a definite possibility. However, the Bank’s governor took a rather cautious tone which indicates that there are unlikely to be any more rises until 2019.

For the time being, base rates on mortgages are unlikely to rise above 3%. That said, the demand for rate fixes will be higher than usual this year.

Unfortunately for those of you going on holiday, after the announcement the pound fell by 0.9% against the dollar. This is due to the extreme political uncertainty surrounding the sterling with Brexit taking an unchartable track.

Reactions from U.K. businesses have been a mixed bag. The Institute of Directors, which represents about 30,000 members in the U.K., has said, ‘the Bank has jumped the gun’, whilst the British Chamber of Commerce similarly described the decision as ‘ill-judged’ at an uncertain time.

This negative perspective wasn’t unanimous among all lobbying groups. The Confederation of British Industry, the country’s biggest business lobby, welcomed the rise saying the case for higher rates had been building.

A small rise of 0.25% is likely to have a minimal impact on your finances. However, larger hikes down the line could have a substantial effect on the British financial landscape.

Sources
https://www.bloomberg.com/news/articles/2018-08-02/pound-fails-to-shake-off-blues-despite-unanimous-boe-rate-hike
https://www.theguardian.com/business/2018/aug/02/how-will-interest-rate-rise-affect-mortgages-savings-and-property
https://www.bloomberg.com/news/articles/2018-08-02/-mark-carney-what-have-you-done-cry-u-k-business-bodies?utm_source=google&utm_medium=bd&cmpId=google

Post-Brexit trade uncertainty: A difficult time for British exports

For British companies who rely heavily on the E.U. export market, Brexit has been a nightmare, to say the least. Until recently, though, the full effects on British exporters have been unclear.

Some versions of Brexit currently under consideration by the cabinet could potentially cut U.K. exports by as much as a third, according to a study by a team of trade experts at the University of Sussex. The study also predicted that a fall in British exports would hit ‘Leave’ voting areas such as Sunderland, Coventry and Derby the hardest.

These areas are traditional hubs for British industry and could potentially see a massive rise in unemployment in the post-Brexit landscape. What’s more, the sectors that some in the government see as replacing industries hit by Brexit – such as design, marketing and hi-tech – as of now have little presence in these areas.

These industries tend to be located around London, the M4 corridor and Cambridge – regions that voted strongly against leaving the E.U., which could, ironically, be the least affected by the separation.

Even if Britain were to sign a free-trade agreement with every other major trade partner, some British industries would still be hit hard.

Food exports, for instance, would fall by 34% and textile exports would shrink by 30%, if the EU implemented protectionist trade policies against the E.U. In this scenario, overall manufacturing output would be cut by 13%.

Already, U.K. trade has begun to suffer from Brexit uncertainty. As many as 9,000 British firms chose either not to start exporting or stopped selling abroad in 2016 because of doubt around Britain’s trade position.

In the year after Brexit, exports fell by 1%, which may not seem like an alarming figure. However, trade commentators suggest that this will grow over time. This is due to the effect of British companies that would have become major exporters, but because of Brexit will never get a chance to explore new markets. As a lag period passes, this is expected to be felt hard and could potentially see the U.K. stagnate as a trade power compared to its competitors.

However, with the final Brexit agreement still highly contestable, the full effect of Brexit on British exports is anyone’s guess.


Sources
https://www.telegraph.co.uk/business/2018/07/29/britain-loses-thousands-exporters-trade-uncertainty/
https://www.theguardian.com/politics/2018/feb/07/brexit-manufacturing-exports-leave

UK properties slower to sell than a year ago

property pricesThe housing market has slowed down significantly. The Royal Institution of Chartered Surveyors (RICS) has reported that whereas last year a home typically took 16 weeks to be sold, the average time is now about 18 weeks. June was the 16th successive month of decline.

While people may be experiencing difficulties in selling their houses, the flip side for those buying a property is that house prices haven’t been rising. This is good news for first time buyers in particular.

According to the Halifax, the UK’s largest mortgage lender, in the year leading up to June 2018, house prices rose at their slowest pace since March 2013 with an increase of 1.8%. The Office for National Statistics reported that annual house price growth fell to 3% in May compared with a month earlier. London property values were responsible for dragging down the rate of growth across country, which was the fourth month in a row of falling house prices for the capital. It was a more positive story for the East Midlands which showed the highest annual growth with house prices increasing by 6.3% over the last year. The slowest increases in house prices were in the north-east of England with prices rising by just 1.3%.

The report also showed that the number of properties estate agents had on their books was at an all-time low. The market appears to be reaching stagnation point. It’s not just properties for sale that are affected either. The rental market is affected too, with many landlords abandoning it as a result of tax changes, such as the stamp duty surcharge. This has hit buy-to-let investors and second-home owners particularly hard.

Simon Rubinsohn, chief economist at RICS, commented that, “It is hard to see what is going to provide much impetus for activity in the housing market in the near term.”

There has been speculation by analysts of a potential interest rate rise this summer. This has contributed to an increase in the number of mortgages being processed. According to UK Finance, the number of new home loans hit its highest monthly total in May. Estate agents feel, however, that this would just have an even more negative effect on the already fragile confidence that exists in the market.
Sources
https://www.bbc.co.uk/news/business-44794225
https://www.theguardian.com/money/2018/jul/18/uk-annual-house-prices-rising-at-slowest-rate-for-five-years-ons

how best to help your grandchildren finacially

Grandchildren & financesBeing a grandparent is an exciting time of life. You get all the enjoyment of doing fun activities with your grandchildren but can hand them back at the end of the day. Part of that pleasure is knowing that you can help them financially. Often you’re at a stage of your life where you’re comfortably off and in a position where you want to give a helping hand to the next generation.

The plus side of this is that you get the opportunity to make a real difference to your grandchildren’s lives. The downside is that the regulations around inheritance tax (IHT) can be confusing and the red tape overwhelming at times. By taking steps to find out what the rules are though, you can make life easier for family members and still be confident that you have enough money for your own retirement dreams.

One important consideration is the timing of your gift. If there’s a new arrival in the family, the financial needs will be very different than if it is to help older children. For example, the priority may be to help the newborn’s family move to a more spacious home or to help with private school fees for a primary school-aged child. Later on, it may be to help with driving lessons, pay for school or university fees or enable them to get on the housing ladder. You may decide you want to leave your money to your grandchildren in your will, in which case it is vital to plan your giving in advance in a tax efficient way.

IHT will be levied on your estate at 40% when you die, so if you’re giving money away now that will have an impact later. The nil-rate band is a threshold of £325,000 for the value of your estate. Anything above that will be taxed. Making monetary gifts can take the money out of the ‘IHT net‘ but remember this only applies for the seven years after you made the gift. It’s worth exploring some extra allowances such as being able to give £3,000 of gifts per tax year (your annual exemption) as well as an allowance for small gifts and wedding/birthday gifts.

There are a number of alternatives to make your gift. If the money is needed before age 18, a trust structure is a tax-efficient way to give money, while still giving you some control on how it is used. A Junior ISA can also be a good option as it grows tax-free, building up a fund for driving lessons or university fees. You can’t open the JISA on your grandchild’s behalf but you can pay into it up to their annual limit, currently £4,260. If they’re older, you might want to consider a lifetime ISA for a housing deposit. Again, you can’t open it for them as a Lifetime ISA can only be opened by someone between the ages of 18-39 but if your grandchild opens one, it’s a way for them to save up to £4,000 a year and get a 25 per cent government bonus on top.

Whatever you opt for, you’ll have the feel-good factor of helping the next generation in a way that is right for both you and them.


Sources
https://www.telegraph.co.uk/money/smart-life-saving-for-the-future/gifting-money-to-grandchildren/?utm_campaign=tmgspk_plr_2144_AqvY5NdHbz57&plr=1&utm_content=2144&utm_source=tmgspk&WT.mc_id=tmgspk_plr_2144_AqvY5NdHbz