Summer 2015 Budget… A Summary

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Budget red boxWell the first all conservative budget is over and lots of changes as expected.

Although there is a lot of information and figures, we have taken the key information for our mortgage and protection customers and highlighted the impact of these to you here.

PLEASE NOTE: This snapshot is not intended as an in-depth analysis of the Chancellor’s speech (we will leave that to the press and experts) but we hope this brief summary helps you gain a quick grasp on the key points delivered by the Chancellor yesterday.

For full details of the following headlines (and more) you may wish to visit the HM Treasury website

The key points affecting mortgages, insurance and housing are as follows:

Insurance Premium Tax

This will be raised from 6% to 9.5% from November this year.  Any policies affected by this rise will be contacted by the provider in due course to advise of the rise and to confirm the new payments.

This is not a rise in premiums, just a rise in taxation and should affect around one fifth of all insurance bought in the UK.

Home Ownership

The chancellor reaffirmed that the government was committed to:

New Help to Buy Isa this Autumn

Giving Housing Association Tenants access to Right to Buy

Further planning reforms to be announced Friday 10th July

Buy to Let Mortgage Interest Relief

This will be restricted to basic rate tax only, meaning that higher rate tax payers will no longer receive tax relief at the higher rate.

This will be implemented over a 4 year period and will start in April 2017

Rent a Room relief

This has been set at £4,250 for the last 18 years.  Next year it will be raised to £7,500, a much more realistic figure in today’s economy.

Inheritance Tax on family homes

From 2017, an additional £175,000 allowance will be granted on top of the standard £325,000 threshold when you leave your own home to either your children or grandchildren.  For couples this means that from 2017 you can effectively leave a property worth £1 million to your family free of charge.

This is particularly welcome to those families that have owned their own home for many years and have seen it grow rapidly in value, especially in the London and South East of England.

However, for estates worth more than £2 million this relief will be tapered away, so the intention is to return inheritance tax payments back to the wealthier estates in society.

Housing Benefits

Mortgage Interest Support, will change from a benefit to a loan.  The timescale to make a claim will also change from 13 weeks to 39 weeks.

This is a major change in benefits and potentially impacts anyone who has a mortgage and is out of work through long term illness or redundancy.

In addition, social housing tenants earning more than £40,000 in London and £30,000 elsewhere will see their rents rise to market rates, rather than being subsidised as they currently are.

Social housing rents will reduce by 1% a year for the next 4 years as well.

Highlights of other changes in brief

Forecasts

  • Chancellor announces that this budget, a one nation budget, puts security first and is a budget for working people looking ahead to the next five years.
  • The Chancellor announced adjustments to previous growth forecasts from those previously announced in the 2015 March Budget.
    • Growth last year at 3% – up from 2.6%
    • Growth forecast for 2015 – revised down to 2.4%
    • Growth forecast for 2016 – unchanged at 2.3%
    • Growth forecast for 2017 – revised upwards to 2.4%
    • 1 million more jobs to be created over the next five years
    • OBR borrowing forecast revised down to £69.5 billion for 2015/16
    • OBR states national debt now decreased to 80.1% of GDP

Taxation/Welfare

  • New National Living Wage of £7.20 to be introduced in April 2016 (to reach £9.00 per hour by 2020 – compulsory for working people aged 25 and over)
  • £12billion in savings required through welfare changes
  • £5billion in savings through crackdown on tax evasion and avoidance
  • Corporation tax to be reduced to 19% in 2017 / 18% in 2020
  • Non-domiciled taxation status to be abolished from April 2017
  • Dividend tax credit to be replaced by £5,000 tax free allowance
  • Inheritance Tax  – up to £1million can be passed onto children without inheritance tax
    • This measure introduces an additional nil-rate band when a residence is passed on death to a direct descendant. This will be £100,000 in 2017 to 2018, £125,000 in 2018 to 2019, £150,000 in 2019 to 2020, and £175,000 in 2020 to 2021.
    • It will then increase in line with Consumer Price Index from 2021 to 2022 onwards. Any unused nil-rate band will be transferred to a surviving spouse or civil partner. It will also be available when a person downsizes or ceases to own a home on or after 8 July 2015 and assets of an equivalent value, up to the value of the additional nil-rate band, are passed on death to direct descendants.
  • NHS to receive a further £8billion over the next five years
  • Public Sector pay rises of 1% for the next four years
  • New youth obligation for 18-21 year olds to ‘earn or learn’
  • Automatic housing benefit abolished for 18-21 year olds
  • Rents in social housing sector reduced by 1% a year for next four years
  • All working parents with children age 3 & 4 to receive 30 hours of childcare per week
  • Working age benefits to be frozen for four years
  • Benefits cap to be reduced to £23,000 in London and £20,000 elsewhere
  • Threshold in tax credit to be reduced from £6,420 to £3,850
  • Tax credit and universal credit limited to two children after April 2017
  • Annual investment allowance set at £200,000
  • Personal tax allowance – increased to £11,000 from April 2016 (further rises in line with minimum wage)
  • Higher rate tax threshold – increased to £43,000 from April 2016
  • Disability benefits will not be taxed or means tested
  • Bank Levy to be reduced over the next 6 years / 8% surcharge on bank profits to be applied from January 2016
  • Insurance premium tax to be raised from November 2015 to 9.5%

Pensions / Savings

  • Green paper to be issued on reform of pensions

National Security

  • Real increase in defence budget guaranteed every year
  • Joint security fund of £1.5billion to be created by the end of Parliament
  • Commitment to meet NATO pledge of 2% of national income on defence

Housing

  • Mortgage interest relief restricted to basic rate of income tax
  • Reduced tax relief for buy-to-let landlords
  • Rent a room relief to be raised to £7,500 from 2016

Education

  • New apprenticeship levy on all large firms
  • To support Universities – From 2016/17 (academic year) maintenance grants to be replaced by loans for students. Loans only need to be repaid once the individual is earning over £21,000 per year.

Transport/Fuel/Energy

  • New car tax bands introduced for new cars from 2017
  • Vehicle Excise Duty: £140 per year for 95% of new cars from 2017
  • New roads fund will benefit from car tax payments
  • First MOT to be extended to 4 years from 3
  • Fuel duty to remain frozen this year
  • Climate change levy to be removed

Northern Powerhouse

  • Further powers to be devolved to Greater Manchester (option available to other cities)
  • £30million funding for Transport in the North
  • Various commitments to growing transport, industry and skills to create growth of Northern cities

Plus – Various other commitments and initiatives to be applied to Southern England, Scotland & Wales, more details to be released in the future.

I hope that this has provided a brief summary to you and covers the key points that affect our customers.

If there are points you want to discuss please feel free to contact me direct on 01278 453926 and I would be happy to discuss further.

Regards

Mark Davis

XL Financial Services Limited

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What You Need to Know about Help to Buy

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Blog 2015 (1)Help to buy may no longer be headline news but it is providing valuable support to people buying a new home, up to 31st March 2016, or earlier if all the funding is taken up. In particular it can help first time buyers struggling with the challenge of finding enough savings to put down a respectable deposit. The scheme comes in two forms: equity loan and mortgage guarantee.

Equity Loan

The equity loan scheme aims to bridge the gap between a small deposit and a mortgage for a smaller percentage of the purchase price. This scheme is available to those looking to move as well as first time buyers, but can only be used when purchasing new-build property from a home-builder registered with the scheme. Under current rules buyers are forbidden from using this scheme in combination with part-exchange on any existing property. Of course, there is absolutely nothing to stop buyers from selling their property separately and using the proceeds to (help to) fund the necessary deposit.

Buyers must be able to put down a minimum of 5% of the sales price (maximum £600,000) and the equity loan scheme will provide a minimum of 10% and a maximum 20% of the purchase price. This means that buyers only have to find a mortgage for 75% to 85% of the price paid. No loan fees are charged for the first five years of the loan. Following this interest is charged on a scale which rises annually in line with any increase in the Retail Price Index (RPI) plus 1%. The loan must be repaid within 25 years or when the home is sold. At that point the borrower has to pay the same percentage of the proceeds of the sale as the initial loan was of the original purchase price. In other words, if the borrower takes out the maximum 20% equity loan, the borrower pays 20% of the total market value on any future sale.

Mortgage Guarantee

The mortgage-guarantee scheme is essentially a form of insurance available to lenders who provide mortgages for higher percentages of the value of the property. Unlike the equity loan scheme, the mortgage-guarantee scheme can be used to buy existing property (as opposed to just new-build property). Shared-ownership properties are, however, excluded from the scheme.

As with the equity loan scheme, the buyer needs a minimum deposit of 5%, but in the mortgage guarantee scheme the lender provides a mortgage for the remainder of the purchase price in the normal way. The lender can, however, purchase what is effectively an insurance policy from the government for up to 15% of the value of the property. This helps to reduce the risk of lending to buyers with smaller deposits.

The mortgage guarantee scheme is open to people who have owned property in the past. Borrowers must, however, have sold the property by the time they enter into the scheme, and must use a repayment mortgage, rather than an interest-only, offset or guarantor mortgage.

It All Means in Practice

For many people, a house is the single biggest purchase they will ever make in their lives. It is therefore crucial to look carefully at all the available options to ensure that you get the best possible deal. It can also be hugely valuable to get some advice from a financial adviser, who can not only answer any questions you have about the house-buying process but also help to make sure that your finances in general are in as good a shape as they can be before you start applying for a mortgage.

How to Save with an Offset Mortgage

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fb - how to save with an offset morgageBuying a home is generally one of life’s most significant events, even for those who have been through the process before. This being so, getting the right mortgage can have a major impact on the family finance.

What Kinds of Mortgage Are Available?

With a repayment mortgage, the monthly payment covers both the capital sum borrowed and the interest due on it. At the end of the term, the mortgage is guaranteed to be paid off in full, providing all the payments have been made on time.

With an interest-only mortgage, the monthly payment is simply to cover the interest owed. At the end of the term the borrower needs to pay off the capital sum borrowed in full.

With an offset mortgage, the borrower essentially has access to a giant overdraft, which is available for a fixed term. The balance must be paid off by the end of the agreed term..

What Are the Main Benefits of an Offset Mortgage?

The benefit of offset mortgages is that the savings made by reducing the interest due on the capital sum borrowed will be greater than the interest earned on money held in a standard current account or instant-access savings account.

Interest income is liable to tax, and the amount of tax due (if any) will, of course, depend on an individual’s circumstances. For working-age adults however, there could be significant savings to be made by foregoing taxable interest income in favour of reduced interest charges.

Offset mortgages offer a higher degree of flexibility than either repayment or interest-only mortgages. Borrowers on regular incomes can calculate how much they need to set aside each month to have their mortgage paid off by the end of the agreed term and stick to that. Borrowers with more variable incomes can increase and decrease their payments in line with their earnings. Likewise borrowers can dip into their savings, if they find they need or want to. Hence overpayments can be made with confidence, since the money can be withdrawn if necessary rather than being locked away.

How Is Interest Calculated with Offset Mortgages?

In terms of interest, offset mortgages typically work in the same way as repayment and interest-only mortgages. They may be fixed-rate, which means that the interest rate is set for a specified period. They may also be tracker mortgages, in which the rate charged to borrowers goes up and down in tandem with changes in the interest rates set by the Bank of England.

Are There Any Disadvantages to Offset Mortgages?

Not so much a disadvantage, more as an observation, is that offset mortgages can be harder to find than either repayment or interest-only mortgages. Borrowers may therefore have to look a bit longer before finding one. Borrowers may also find it more challenging to move from one provider to the other in search of better deals (e.g. new fixed-rate deals). While it is quite possible that the availability of offset mortgages will increase as people become more aware of them, this cannot be guaranteed.

Likewise, some people may prefer the security and imposed discipline of repayment mortgages, even if they may not be the best deal from a strictly financial perspective. The flexibility of offset mortgages may lead to temptation or alternatively to individuals being overly worried about spending money which has been put into their mortgage fund. Getting some advice from a financial adviser can help to resolve these issues and give you the best chance of finding the right mortgage for you.

Getting the best life insurance policy

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Screen Shot 2014-12-11 at 16.49.51When thinking of the family finances and your personal wealth, savings and investing may be at the top of your agenda. For some people however, life insurance can be a crucial part of taking care of dependents and loved ones in the event of their (untimely) death. With this in mind, it can be helpful to understand what options are available and how they can apply in the real world.

Option 1 – Term or Whole Life?

A whole-life policy, as its name implies, is valid for the whole of your life. In other words, it is guaranteed to pay out at some point, providing you maintain the premiums. A term policy will pay out if you die within a certain period of time – the “term” of the policy. Term policies can be useful to cover a present need, which you assume will be resolved at a set point in the future. For example, it could cover the period of a mortgage or the period until minor children become adults.

Option 2 – Level, Increasing or Decreasing Benefit?

The next question is whether you want the level of cover to stay the same over the term of the policy (level term), whether the level of cover should go up of the policy (increasing term), or whether the level of cover should go down of the policy (decreasing term).

Your choice is likely to be influenced by the purpose of the policy. For example if the insurance is purely to cover a repayment mortgage, then a decreasing-term policy could offer the best value for money. The need for insurance cover will reduce as the outstanding mortgage is reduced and therefore there may be nothing to be gained from having extra cover. If, on the other hand, the policy needs to provide for young children in the event of the death of a parent then an increasing-term policy could be used to ensure that any benefit keeps pace with inflation.

Option 3 – Lump Sum or Family Income?

A lump-sum pay-out can help with the immediate financial aftermath of bereavement. For example it can take care of funeral expenses or pay off a mortgage. On the other hand, suddenly coming into a large sum of money can bring its own problems. There is no shortage of real-life stories about lottery winners who have wound up in poverty due to having mismanaged their wealth. Some people may find that suddenly having responsibility for managing a child’s inheritance creates more stress during an already difficult period. They may prefer the security of knowing they will have a regular monthly (Family) income to replace the deceased’s financial contribution.

Key Question – What Level of Cover Is Required?

Having too much cover might cost money which could be used elsewhere. Having too little cover could pose serious difficulties for your loved ones in the event of your death. That said, if you are on a tight budget, then having even some cover may well be better than having none at all. Again, the ideal level of cover will depend on your individual circumstances.

Planning for the Future

As the old adage goes “Hope for the best, prepare for the worst”. A financial plan should cover both the best case scenario (a long and happy retirement) and the worst case scenario (an untimely death). Because of this, it can be hugely helpful to get some advice from a financial adviser. This is particularly true for people who need to ensure that young children will be provided for in the event of the death of one or both parents. Even those without children, however, need to think of their own plans for the future, and how they are going to finance them.

 

How to Bag Christmas Bargains

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fb - Christmas BargainsChristmas comes but once a year and for all the fun it brings it can be a significant drain on the family finance. With that in mind, it’s worth looking at opportunities to see where savings can be made. While it may still be too early to put up the decorations, some of the best Christmas bargains require a bit of advance planning.

Food and Drink

Think about having a non-traditional Christmas. Christmas dinner does not have to mean turkey (or any other kind of bird) and all the trimmings followed by Christmas pudding. Going vegetarian or opting for cheaper forms of meat can cut the costs without compromising on taste. Likewise, dessert can be anything you fancy rather than something which is specifically made for Christmas.

Actively compare the cost of making food at home as opposed to buying it ready made. Neither is necessarily cheaper or better. Be prepared to consider the budget/own-label brands. You may be pleasantly surprised.

Get in plenty of “soft” drinks. Keep expensive wine and spirits for particularly special times. For the rest of the time serve soft drinks either on their own or with a dash of alcohol (e.g. in a punch). This can help to make the expensive alcoholic drinks go much further.

Entertainment and Travel

If at all possible, book Christmas entertainment and travel well in advance. It can also help to be flexible when looking at your options. For example, whilst air and rail can be both quick, the bus can be substantially cheaper. Likewise smaller, more local entertainment venues can also put on very good shows, which can be substantially more affordable than their larger-scale counterparts. It can also be worth looking at whether signing up to a loyalty programme can cut costs even further. Similarly cultural venues may have a “friends of” programme with discounts.

Cards and Gifts

This is arguably one of the trickiest areas of Christmas. The key to managing it is setting expectations. This starts with setting a realistic budget, which means one that you can comfortably afford. Your budget is a limit not a target and if there is a conflict with it and your plans for card and gift giving, then you should change your plans, not your budget. Make a list of all the people to whom you want to give cards and/or gifts at Christmas. The key word here is want. If you routinely send gifts to people just because you know they’re going to send one to you, then put those names on another list. Contact these people well before Christmas to make them tactfully aware that you’re only planning to send a card this year. They may be relieved.

Your next challenge is to make your money go as far as possible. Ways to achieve this include: watching the internet carefully for special deals and flash sales; buying second-hand and creating home-made gifts. These can not only be welcome gifts in their own right, but help to keep the pennies for when they are really needed. Adults and older children could even be given IOUs for items which are likely to come down in price in January.

Avoiding New Year Financial Headaches

Keeping control of spending at Christmas can help you avoid a nasty money hangover at New Year. Why not go one step further and a make a resolution to review your personal wealth this coming year by investing some time getting advice from a financial adviser?

How to match your life cover to your mortgage

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fb How to match your life cover to your mortgageAnyone who’s watched Strictly Come Dancing will have had the opportunity to appreciate the importance of keeping all aspects of the performance in synch with each other. If it matters in a 90-second dance routine then it matters even more when looking at protecting your financial future. Whether you’re looking at savings, investing, insurance or any other financial product, your overall aim should be to improve your personal wealth and every decision you take should lead towards that goal. Of course, the Strictly celebrities don’t work on their own, they get help from experienced pros, so when looking at managing the family finance, it can help to get some financial advice from a financial adviser.

Make sure all financial products work effectively together

An example of two financial products which very much need to be kept in step with each other is that of mortgages and life insurance. The fundamental purpose of life insurance is to provide a financial cash cushion for those who are left behind after a death. In short it allows beneficiaries to focus on dealing with the emotional aspects of bereavement without facing the additional distress of financial difficulties. The prospect of a grieving partner having to sell the family home due to an inability to meet mortgage repayments is one that can feasibly be averted with forward planning.

Every time your circumstances change, make sure that your finances stay in synch with them

The key point is to ensure that your life insurance reflects the reality of your outstanding mortgage. Assuming you take out (or update) your life cover when you buy your first home then the level of cover will reflect the amount needed to take care of the mortgage in the event of a death at that point. If, however, you increase the size of your mortgage for any reason, then you need to ensure that your life insurance cover will still do its intended job. The most obvious reason for taking on a larger mortgage is, of course, moving house, but you could choose to increase the size of your mortgage for other reasons. For example you may want to extend your current property as an alternative to having to move.

Be prepared for life’s slings and arrows

As well as looking at the potential consequences of you or your partner dying, it’s also important to think about what would happen in the event of one or both of you being out of work for any length of time. This could be due to the employment market or alternatively due to serious illness or accident. Should any of them happen to either of you, then having the right insurance cover in place could make all the difference to your financial and emotional comfort. In short it could mean the difference between worrying about paying the bills and being able to concentrate on making a full recovery.

In short, insurance is about making sure that you and your loved ones are protected if the worst happens. It’s probably one of the few products people buy actively hoping that they’ll never need to use it. For many people, however, it is an essential part of their overall financial planning and needs to be kept up-to-date in line with their changing needs.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

How To Get The Best Remortgage Deals

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fb - How To Get The Best Remortgage DealsIn the next twelve months an increase in the base rate of interest is highly likely. Rising house prices caused by the government’s Help To Buy scheme have reached levels that are causing alarm at the Bank of England and a rate rise is the only measure that can slow them down.

Home owners may be considering remortgaging in the coming year before rates rise, and this article is a quick guide to help borrowers think about how to get the best deals they can.

One motivation for getting a new mortgage is for locking in a low fixed rate for the next five years. The best deals twelve months ago were at an astonishing low of 2.5 percent.

Deals like that are unlikely to come round again soon as interest rates eventually start to rise, but offers of around 3 percent are currently available.

Loan to Value

The rate you are offered will be based on the degree of risk your home loan presents to the lender, amongst other criteria.

Lenders calculate the degree of risk based on the size of the loan compared to the size of the mortgage.

If you are buying a £100,000 property and you can cover the first £50,000 yourself or with help from family members, you will need to borrow £50,000.

This means your Loan To Value (LTV) ratio is 0.5, and the closer the LTV is to one, the higher the risk and the rate of interest will rise accordingly.

Everything you can possibly do to bring the LTV down will help as it will make you more attractive to lenders, save you money in the long run, and put you on a much more stable financial footing in your new home.

The New Lending World

If you haven’t been to see a mortgage advisor in a few years, you’ll notice a big difference as the rules surrounding borrowing have become far stricter since April this year.

The horror stories of irresponsible lending before the 2008 crash, combined with the government’s massive help to home owners with Help To Buy have led regulators to impose stringent new borrowing rules.

Expect your mortgage advisor to want to see your entire financial history, bank records, confirmation of employment, savings, credit reports and more.

Pay off any outstanding debt, even if it’s just £50 on a store card, any black marks on your credit score could be potentially fatal when it comes to securing a lending decision.

Rates

In Britain there are, in general, three types of mortgage deal commonly available, and these are fixed rate, variable rate and tracker mortgages.

A fixed rate mortgage offers borrowers a degree of security, it means that if the base rate of interest rises in the future, the lender will continue to offer the rate that was set and that offer will typically run for five years. It is a way of future-proofing your mortgage against sudden and unexpected mortgage rises and typically most people choose them.

Variable rates have been popular in the last five years. Whereas fixed rates are ‘fixed’ at higher levels to enable the lender to get as much out of the deal as the borrower (arguably more), a variable rate simply responds to the Bank of England’s base rate of interest.

When the base rate is low your mortgage is cheap, and when the rate is high, it’s more expensive. Rates have been half of one percent for six years but this is likely to end soon, leaving many variable rate borrowers seeking fixed rates.

A tracker mortgage is similar to a variable rate mortgage, as it follows the base rate set by the Bank of England but at agreed set margin (perhaps one percent), meaning that a one percent rise in the base rate will not result in a three or four percent rise from your high street lender.

Financial Planning

If you’ve already got a mortgage and you are thinking about protecting your wealth against future changes in the economy it is important to see this as part of your long term financial strategy.

If you are unsure about what next steps to take with your remortgage then contact us.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

 

Financial Conversations Every Couple Should Have

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fb - Financial Conversations Every Couple Should HaveIt can be hard to define the point when two people become a couple, planning to be together for the years to come. When it does happen however it can be an appropriate time to make sure that all practicalities are addressed. This means ensuring that you and your partner are aligned financially as well as emotionally. Entering into a relationship means changing from thinking in terms of personal wealth to thinking in terms of family finance. Here are five questions to get you started on these important conversations.

Do you have savings?

Before you start to align your finances, you both need to be honest to each other regarding the state your finances are currently in. This means that both of you need to be clear about your financial assets such as savings and their financial liabilities. You also need to be clear about your attitudes to money. From this point on you’ll be working to a joint financial plan and it’s crucial that you’re both comfortable with it. With this in mind, this may be a good point to get some professional advice from a financial advisor.

How would you describe your attitude towards investing?

There are a variety of different investments available and choosing the right one(s) for you depends on a number of factors including your goals, your anticipated time frames and your tolerance for risk. If you’re to develop a financial plan with which you both feel comfortable, then you need to agree on an investment style with which you both feel comfortable. You’re also going to have to reach an agreement on how to manage the practicalities of investing. In other words, who is going to take responsibility for choosing investments and going through the process of buying them? Even if one partner takes day-to-day responsibility for this, the other partner needs to be in touch with what is happening. They also need to know where to find all relevant documents in the event of something happening to their partner.

What would happen if one of us died tomorrow?

There are basically two parts to this question: Why do we need life insurance and if what needs to be in our wills? The answers depend largely on circumstances. When property or children come around, for example, then making provision for the death of one half of the couple needs to be taken very seriously. In addition to looking at loss of income from working partners, couples may also need to look at the cost of replacing everything each half of the couple does for free, e.g. providing childcare. This can mean that life insurance is just as important for the non-working partner as it is for the working one.

What would happen if one of us became severely ill/had an accident tomorrow?

This is a fairly similar question to the one of death; however in this case you also need to think about the cost of providing care for the affected partner as well as (temporary) loss of income and their general input to the family.

What sort of retirement do we want to have?

Understanding how you want to spend your post-work years is the first step in working out how much money will be required to pay for them. This is another area where is can be particularly helpful to get professional advice from a financial adviser.

5 Estate Agent Tricks That Can Add Value To Your Home

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fb 5 Estate Agent Tricks That Can Add Value To Your HomeA house can be a combination of a financial investment and a family home. It can be a store of personal wealth where adults organize the family finance and children get their first lessons in the importance of having savings. Buying and selling a home can have major financial implications as well as emotional ones, so it can be a good time to get some professional advice from a financial adviser. If you’re selling a home, it can also be worth investing a little time and possibly some money on your home to achieve the best possible price. Here are some suggestions to help you.

Create curb appeal

The first impression of a property is usually from the outside so make sure viewers are impressed. If your garden is a major selling point then it may be worth speaking to a professional gardener for tips on how to make it look its absolute best. For example some strategically-placed lighting could highlight its best features to visitors arriving for evening viewings. Even if you don’t have a garden, you will have an entrance door and some quality fittings (number or name, letter box, door knocker…) can make a huge difference to its appearance.

Make sure viewers are comfortable when they arrive

Viewers aren’t exactly guests but they are people you want to stay in your home for a while and be in a mood to appreciate it. Make sure that there is somewhere obvious and convenient for them to put their coats and consider having some extra pairs of slippers to offer them (which might also be good for protecting your floors). Be prepared to offer tea or coffee and some quality biscuits and serve them in attractive cups or mugs.

Remember allergy sufferers

Common allergies include nuts, pet hair and pollen. It’s therefore worth taking steps to remove any of these before viewers arrive. While fresh flowers can look very attractive and some viewers will love them, they are unlikely to win you any brownie points from people with hay fever. Green plants and/or fresh fruit, however, are more allergy-safe and also attractive choices. Remember to put them in containers which match with the overall décor of the room.

Make sure your home passes the sniff test

Any potentially offensive odours need to be properly banished. With a view to this, if anyone is in the habit of smoking in the house, then they need to stop doing so until the house is sold and the house will need to be thoroughly aired. If there are young children or pets that may have accidents then you need to have something on hand to deal with them quickly. If you have a cat who uses a litter tray then it may be worth upgrading to an enclosed one in case your cat chooses to use it when you have viewers. Empty it promptly outside of viewing times and keep pet cages scrupulously clean. While it may be tempting to try to use scent to enhance the atmosphere of your home, it’s worth remembering that individuals react to scents differently. You therefore run the risk of accidentally fragrancing your home with a scent that you love but your viewer hates. It’s also worth remembering that pregnant women have an enhanced sense of smell and so even light scents may seem overpowering to them.

See your walls and shelves as others may see them

Remove anything which could be remotely controversial, such as an object showing affiliation to a sports team or political organization. Take a long, hard look at everything else and decide if it is in keeping with the image of your house that you want to give. A studio portrait of your children could be an attractive feature in a family home but basic family snapshots are probably better moved out of sight, along with children’s paintings and home-made gifts etc.

How To Build A Nest Egg For Your Child’s Future

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fb Building a nest eggWhatever your child wants to do when they’re older, preparing a nest egg for them can be a great help when the time comes for them to spread their wings and fly the nest. As an added bonus, showing your child how to manage the family finances in order to create personal wealth can be a valuable lesson in itself.

Start by making a financial plan

Securing your child’s future is so important that even the busiest people should strongly consider making time to get some high-quality financial advice from a professional financial adviser. There are many steps between birth and young adulthood and a number of decisions for parents to take along the way. In particular parents need to think about the benefits of spending money during their child’s younger years as opposed to investing it for their later ones.

Remember that time can turn pennies into pounds

Even if you can only put aside small amounts each month, it’s still worth doing so. Time will help those pennies grow into pounds. With this in mind, the earlier you start saving for your child, the longer time will have to work its magic. If, however, your child is already well on their way to growing up, then it’s still worth putting aside whatever you can for their future needs. Put quite simply, whatever savings and investments you can build for them, it’s going to be better than nothing.

Invest as much as you can afford

Roughly speaking most children will follow a similar path from birth to the end of compulsory education. During this period the key financial question is often whether a child will attend a private school or a state school. In either case the time the need to complete their core education is essentially the same. After core education is finished young people can choose to follow different paths depending on their interests and talents. These paths can broadly be defined as further education, professional training, employment or a gap year. Each of these paths has different financial implications. It’s worth considering, therefore, having as much money as possible available for them. Even if it is not needed, it may make a significant difference to their start in adult life. For example young people who find jobs may be able to get to them by public transport, but having their own transport can make life much easier.

Aim to invest regularly

Even when money is tight, try to look on investing for your child’s future as an integral part of managing the family finances. This may mean taking the decision to tighten other areas of spending in order to be able to plan ahead. Of course, it’s fine to top it up with extra funds from time to time. For example, family and friends could be encouraged to make donations at Christmas and birthdays instead of spending their full budget on presents. These should, however, ideally be extra funds rather than the bulk of them. Having said that, as always, even if you can only afford to set money aside from time to time, it’s still better than nothing.

Look out for the tax man

Children get the same personal income tax allowance as all people born after 5th April 1948. Under certain circumstances children can receive income from children’s savings accounts (which are different to Junior ISAs) without paying any tax on the interest. For this to happen, their parents need to fill in an R85 form. Junior ISAs, meanwhile, work in much the same way as their adult counterparts. It should however be noted that as soon as the child reaches 18, the full ISA will immediately become their legal property to use as they wish. Parents with concerns about how their child will react when suddenly handed a large sum of money may need to look for other ways to prepare for their future. This may be a good time to get some unbiased financial advice from a professional financial adviser.

Tax bands http://www.hmrc.gov.uk/rates/it.htm

Tax on saving’s interest http://www.hmrc.gov.uk/taxon/bank.htm

Rules on interest on children’s savings from funds given by parents http://www.hmrc.gov.uk/manuals/saimmanual/saim2430.htm

ISAs/Junior ISAS http://www.hmrc.gov.uk/taxon/savings.htm