Coldrey Wealth Management - News Round-Up 14th July 2017

Spacer image

Welcome to our latest round-up of some of the interesting comments and articles collected from the financial press over the past few weeks.

For those of you who enjoy our quarterly investment review service, you can look forward to receiving your latest review pack very soon.

If you have any comments or feedback please feel free to share them with us by emailing mail@coldreywm.co.uk

 
Spacer image
 
 

Millions at a loss on pension funds

Millions of savers have no idea whether the fund in which their pension savings are invested is any good, says the Times, citing recent research. This showed that many insurers are among those whose funds are in the doghouse, having earned consistently poor returns. The difference between the dogs and better funds is equivalent to tens of thousands of pounds at retirement.

Regulator fails fund investors

The Times is one of several newspapers to criticise the Financial Conduct Authority for not being tougher on fund managers. The FCA's report into the sector followed a highly critical interim report last year, but the final report proposes no actual measures to reduce fund costs or to introduce what even many fund bosses think is a good idea, a single all-in annual charge that would enable investors to make like-for-like comparisons across the industry. Some blame the FCA's timidity on heavyweight lobbying by fund management groups.

No big changes on pensions

A statement by the government minister in charge of pensions was interpreted by many, including the Financial Times, as signaling there would be no major changes to pension tax relief in the next few years. Reforms to the tax relief system had been considered by the previous Conservative government but such a major upheaval now looks very unlikely.

Fewer divorces, but more silver ones

The number of divorces fell by 9 per cent in 2015, in line with a long-term trend. But the average age of divorcees keeps rising, as it has done since 1985  - it is now 45 for men and 44 for women, reports the Financial Times. The result is more complex financial settlements, say lawyers. Older people have more assets and more pension rights, which are themselves increasingly valuable – for example, a £30,000 a year pension entitlement is worth over £1 million. The home, say lawyers, may not be the biggest asset that has to be divided.

Motoring with a black box

There has been a sharp rise in the number of young drivers using telematics - black boxes fitted to their cars - to cut the cost of car insurance. The Mail cited the case of two 19-year-old sisters who got cover for their small car for £1,600 with telematics after being quoted premiums of up to £7,000 by other insurers. The Mail journalist who tried the black box found it slightly disconcerting – it constantly measures your speed - but confessed that it would probably improve her driving.

New rules to hit BTL

New rules due to be introduced by the Bank of England at the end of September could make it harder for Buy-To-Let owners to obtain mortgages, says the Telegraph. The rules will require lenders to assess the viability of the whole portfolio if someone owns more than four properties. The change comes on top of restrictions to BTL owners' ability to claim tax relief on mortgage interest, and there is also uncertainty about how lenders will interpret and apply the rules, so brokers are urging owners to refinance before they take effect.

Let's all go to uni

There has been a rise in the amount of student housing  owned by private landlords, says the Financial Times. Southampton, Leicester, Liverpool, Exeter, Brighton and Hove are among the cities that have seen the largest increases. Letting agents say one reason is the higher yields available on student lets, though costs of management are also typically higher.

Keep on borrowing

The number of mortgage borrowers aged over 70 has soared by 75% in the past five years, says the Mail. Many have obtained new loans because their existing mortgage lender won't extend the repayment term of their current loan.

Three quarters of graduates will never repay their loans

Analysis by the Institute of Fiscal Studies shows that three-quarters of students will never repay their student loans, reports the Financial Times. One reason is the very high interest rates applied to student loans (RPI plus 3 per cent), which mean the average graduate accrues as much as £5,800 in interest even before they graduate. The result of high interest rates is that the debt rises too fast for repayments to keep pace. Taking into account the write-off of loans that aren't repaid adds £5 billion to the bill paid by the government - about half the cost of abolishing tuition fees entirely as proposed by the Labour Party.

The cost of education

Parents in the UK who pay for private education for a child at primary, secondary and tertiary levels spend on average £128,600, says the Financial Times, citing research by HSBC. That is ten times the average cost of state-funded education and is second only to average spending in Hong Kong out of the 15 countries in which it conducted its research. A quarter of parents wish they had saved more, but  only Chinese parents seem to be good at planning ahead, with most parents still paying the bulk of costs out of current income.

 
Twitter Link
 
www.coldreywm.co.uk
 
 

Coldrey Wealth Management

19 Langton Place, Whiting Street, Bury St Edmunds, Suffolk IP33 1NX

Telephone: 01284 700477 

Email: mail@coldreywm.co.uk

 

We do hope you like receiving our newsletters but if you would prefer we didn't send them you can unsubscribe by clicking HERE

 

The information in this publication is produced from multiple sources and does not necessarily reflect the view of Coldrey Wealth Management. Nothing contained in this newsletter constitutes a recommendation or financial advice. You should consult us or another suitably qualified professional before taking action on the basis of the information in this newsletter. While Coldrey Wealth Management makes every reasonable effort to provide information that is as comprehensive, accurate and as clear as possible, it is based on our understanding at the time of publication and is subject to change.

Coldrey Wealth Management is a trading name of Coldrey & Bryant Consultants Ltd and is authorised and regulated by the Financial Conduct Authority. FCA No 624006.  Registered office: 15 Whiting Street, Bury St Edmunds IP33 1NX. Registered in England and Wales Number 456429.