TAKE ADVANTAGE OF THE VALUE IN YOUR PROPERTY

As more and more older people need to take advantage of the value in their residential properties to help supplement income or for home improvements, the Equity Release market is growing. With the increased competition there is more choice and better interest rates. If you are in a position where you may need to consider this, we will be pleased to assist in researching the options for you without cost or obligation. Just give us a ring on 01342 313302 or email us. Note: the minimum age for Equity Release is usually 55. In the case of a married couple, the younger of the two would have to be at least 55 years of age.

COMPANY ANNIVERSARY - 33 YEARS !!!!!

Sovereign Finance in East Grinstead celebrates its 33rd Anniversary at the end of January 2014. The longest established firm of financial advisers, Sovereign Finance has been involved closely with the community throughout its 33 years, including sponsorship of youth sport, charitable fundraising, serving on the Chamber of Commerce (not the East Grinstead Business Association). Senior partner, Tom Shuster, commented: 'Nice to be helping the children of our original clients! 33 years gives us a lot of experience and know-how which we can use to help all our clients'.

NEWS ON THE STATE PENSION

More and more people are reaching what used to be the Basic State Pension Retirement Age (60 for women and 65 for men), only to find the goal posts having been moved with 66 being now the State Pension age for most. And the Autumn Budget made it clear that the goal posts will be wheeled back even more in the future with those now in their 50s given the expectation of working until age 67 and those in their 40s having to work to 68 before the State Pension kicks in. It is not good news but the fact is that with the UK population having a larger and larger proportion of older men and women, the Government cannot afford to pay the State Pension from an earlier age. To some degree this news may help focus many on accumulating their own private pension savings. Currently the legislation allows those benefits to be taken from age 55, and no-one is pushing for that age to be increased – at least for now!

THE AUTUMN STATEMENT

If we focus on the changes taking place in April 2014, we have the following tax changes: 1. Personal Tax Allowance increased from £9,440 to £10,000 2. Basic Rate Tax Band down from £32,010 to £31,865 (meaning that with the first £10,000 earned being subject to nil tax, you will not start paying 40% tax on earnings until they exceed £41,865 – marginally better than last year’s £41,450). 3. Individual Savings Accounts (ISAs) go up to £11,880 (last year £11,520) with half of this(£5940) able to be put in a Cash-ISA. 4. The main rate of corporation tax will be cut from 23% to 21% from April 2014. 5. A £1000 business rates discount in 2014/15 will apply to retail properties including pubs,cafes, restaurants and charity shops; and a 50% business reoccupation relief for businesses that move into retail premises that have been empty for a year or more. There is no change in the Property Stamp Duty Tax (still nil on purchase prices up to £125,000, 1% up to £250,000, 3% up to £500,000, 4% up to £1 million, 5% up to £2 million and 7% for over £2 million). The threshold for Inheritance Tax also remains unchanged at £325,000. The Capital Gains Tax Exemption is another tax allowance that is not changed this year –remaining at £11,000. And for those with significant pension savings, there is actually a reduction in the amount of pension they are entitled to accumulate in their lifetime (Lifetime Allowance) from £1.5 million to £1.25 million. The future carrots being dangled include: 1. From April 2015 no employer’s National Insurance tax on employees under the age of 21. 2. From 2015/16 married couples who are not higher rate taxpayers being able to possibly benefit when one spouse is not earning enough to use up all of their Personal Tax Allowance. Effectively this will be worth up to about £200 a year less tax for the couple to pay. 3. The Capital Gains Tax Exemption is promised to go up to £11,100 from April 2015. And then there is the contentious issue of an 11% pay rise for Members of Parliament from April 2015!

Start of 2014

With the start of 2014 Sovereign enters its 33rd year of trading. As always there were challenges to overcome in 2013 and more coming up in 2014. 2014 starts with an economy which looks to be on the road to recovery and with that cautious optimism comes an improving property market. The market will continue to benefit from the Government’s Help-to-Buy schemes as more first-time buyers and property movers now can buy with as little as a 5% deposit. In 2014 more employers will face having to move over to Compulsory Enrolment whereby they have to bring all of their staff into a company pension scheme and start paying something into the employee’s pension as well. While it represents a worthwhile effort to get people to start saving for retirement, it represents a large new administrative burden on employers. Those with 50 employees or less are not in the firing line until 2015/16. 2013 certainly had Great Britain fully on display with the Queen’s Diamond Jubilee, the Olympics and Para-Olympics, and a Brit winning the Wimbledon Men’s Finals for the first time in a very long time. 2014 may not be as full of spectacular presentations. There are the Winter Olympics in Russia and the World Cup in Brazil, but predictions of great results in either of these are a bit hard to find. 2014 will probably see politicians making many promises in advance of the next General Election in 2015. This was already visible in the Government’s Autumn Budget Statement. The Chancellor made a number of promises not due to start until April 2015 while the General Election is due to take place on 7 May 2015 and he might not be around afterwards!

Warning - plastic may damage your wealth!

As we move into the Christmas spending season, do remember that credit and store cards should be paid off in full each month. Otherwise the outstanding amount owed can hang around for many Christmases to come.

Will Interest Rates Increase?

Think Ahead ! Improvements in the UK economy are good news but are also warning lights for an increase in interest rates. The Governor of the Bank of England's target for unemployment is getting close. It is a good time to lock into fixed rates with your residential mortgage to avoid hikes in your monthly outgoings. We recommend looking at five year deals.