MORTGAGE STRATEGIES

First: Ensure you have the best rate you can achieve with your mortgage. In some cases the existing rates are variable but very attractive so changing them may not be a good idea. But generally you should make sure you are not just staying with your lender’s SVR (Standard Variable Rate) for lack

of a bit of initiative and asking for better.

Second: If you have an interest-only mortgage, you should review your plan for paying it off by

the end of the mortgage term, and make sure that plan is still workable. For some that may meandown-sizing, but where down-sizing may have looked attractive many years ago, when one is older it can look less attractive to have to move out of a place you still enjoy living in and moving away from an area you know and where you have friends and activities you enjoy. If you are in that situation, you may wish to move over to a repayment mortgage to get it paid off, or look at a Lifetime Mortgage to buy yourself more time. Lifetime Mortgages have become more and more flexible. Avoid the Interest-Only Mortgage Trap!

A NEW TAX YEAR!

As we thaw out from a remarkable period of cold weather, we move into the new

Tax Year with some uncertainties. Interest rates have started an upward move although

the Chairman of the Bank of England has promised that these would be small and far apart.

Brexit still is the focus of most of the Government’s attention when there are a number

of other areas that should be dealt with. Nevertheless, personal financial matters to be

addressed are pretty much the same as they have been for quite a while, i.e. getting the

best possible mortgage rate, while also making savings – using pensions or ISAs and

ensuring those savings make as good a return as possible.

WORKPLACE PENSIONS – PAYMENTS TO INCREASE

If you are employed and paying into a Workplace Pension, you should be advised by the

provider or your employer that the minimum payments will increase from 6 April 2018.

Currently the minimum payments have been 1% of salary by the employee and 1% by the

employer. These will increase to 3% by the employee and 2% by the employer. A person earning

£20,000 per annum (and with a scheme where the full pay is used to calculate the payment) would

see an increase in their deduction from about £14.00 per month to about £40.00 per month. While

that is a large increase, if you take into account what the Government adds and what the employer

adds, that £40.00 paid in would mean a total of about £84.00 going into the pension – a return of

210%! It is something to be aware of and budget for.