This month, we are exploring a range of factors to help you get your finances in order. From remortgage advice to home insurance, and some healthy workplace tips starting with private health insurance.
We also examine critical illness cover and how an adviser can provide bespoke information, as well as how to use equity release for school fees. Finally, in our last article this month, we take a look at some of those election promises.
Barclays* recently announced an analysis of the mortgage market, predicting significant changes between July and December 2024. During this period, over £98.4 billion worth of residential mortgages and £16.4 billion worth of buy-to-let deals will be ending.
If you need help securing a new mortgage on a property you already own, contact us today to see what deals we can find for you. Keep reading to discover some reasons why you might want to remortgage.
Fixed-term mortgages typically last between two and five years. After this period, you’ll transition to your lender’s ‘standard variable rate’ (SVR), which is likely to be higher than your previous interest rate. Currently, SVRs are around 7.5% to 8.5%. To avoid this, it’s wise to be ready to remortgage before your fixed rate expires—six months before the end is an ideal time to start looking for a new rate. Chat with us directly to avoid delays!
Be cautious, though: you may have to pay an early repayment charge (ERC), which is often 2-5% of your outstanding loan, along with a small exit fee (such as an 'admin fee' or a 'deeds release fee'). However, after weighing up the options, the savings from switching deals may make this a better long-term choice. We can help you assess the costs associated with securing a better interest rate, so don’t be discouraged from searching for a better deal.
You may find that your property’s value has significantly increased, placing you in a lower loan-to-value band, which could make you eligible for lower interest rates. Let us investigate this for you if you think you may be eligible.
If you’ve received a pay rise or inherited some money, you may be keen to reduce your mortgage balance by making extra payments but find that you’re unable to do so.
A remortgage could allow you to reduce the loan size and potentially secure a more competitive rate as a result. But, as mentioned earlier, watch out for any early repayment charges or exit fees. We can help you compare these costs to how much you’d save with a lower mortgage.
Before considering remortgaging, your lender may be willing to make this change for you. In many cases, you can even convert part of the loan to capital repayment while leaving some on your interest-only deal. For instance, if you have an underperforming endowment mortgage that is likely to result in a shortfall at the end of the term, switching to a capital repayment arrangement could be beneficial.
Keep in mind that the most acceptable reasons to raise additional funds are for home improvements or paying off other debts. Be prepared for your lender to request evidence if you’re borrowing a significant amount, such as builder quotes or proof that you’ve paid off debts.
With all these points in mind, let’s consider when it might not be suitable to remortgage:
We can discuss these factors with you directly to ensure you receive expert advice.
There has been a 6% increase in combined buildings and contents insurance since last year. In the current economic climate, inflation is affecting everything, and homeowners across the UK are feeling the pinch—making peace of mind more critical than ever.
We are constantly scanning the market to find the best insurance deals, so contact us to see if we can secure a better policy for you.
It's more important than ever to understand your policy and ensure you’re getting the best value for your money, as well as the right level of protection for your property and possessions. Inflation, extreme weather, rising building material costs, and fraudsters making fake claims are all driving up premiums.
Consider factors such as location, home size, age and type of residence, rebuild value, and personal belongings, as these will all affect your premiums.
When it comes to your contents policy, don’t forget to include everything you’d need to replace within the house—from carpets and appliances to furniture, bikes, laptops, phones, and jewellery. It may be wise to add extra protection for high-value items.
However, with premiums (and most things!) on the rise, updating your home doesn’t have to be expensive. Here are some free or low-cost ideas to refresh your space:
These small changes can make a big impact without breaking the bank. Have you tried any of these tips? We’d love to hear what else you’d recommend.
When it comes to home insurance, being well-informed about the factors that influence your premiums—and understanding the actual value of your property—can lead to significant savings. It’s crucial to ensure you have adequate protection in place.
With the right approach and our assistance, you can compare home insurance coverage, costs, and value, securing a policy that meets your needs and fits your budget, even in the face of rising inflation.
Remember, home insurance offers peace of mind, knowing that your home and possessions are well protected. We’re here to help!
Did you know a healthy workplace can influence productivity, health, and well-being? Unsurprisingly, better employee health can bring significant benefits for businesses. As a bonus, health insurance can support this and help ensure fewer days off sick!
Here are some tips to create a healthier workplace:
- Bring your own lunch to work. Ask your employer to ensure the kitchen is well-equipped. Most are happy to help.
- Going for walks, runs, swims, or hitting the gym at lunchtime can lead to a more focused afternoon at work. Speak to a local fitness club about offering discount memberships for the whole office.
- Print out simple exercise guides to place around the workplace.
- Establish a ‘break-out’ room where employees can make personal phone calls or have some quiet time.
Health insurance company Vitality reviewed the data from their Britain’s Healthiest Workplace study. The results may surprise you… Keep reading to find out more!
Employees are losing a significant amount of time due to ill health.
On average, organisations are losing 49.7 days of productivity per employee each year. Of this, 90% is due to reduced productivity, and the remainder is due to health-related absences.
The rate of productivity in the UK is declining, more than doubling since 2014. As a result, low productivity costs the UK economy £138 billion per year.
On the flip side, healthier employees lose less productive time. Vitality data shows that those in better health lose just 32 days of productivity a year, compared to a significant 81 days for those in poor health.
Improving employee health is complex and requires a personalised, data-driven approach.
Mental and physical health are closely linked to employee productivity. Those at risk of depression and burnout lose more days each year—109 and 93 days, respectively—compared to 43 and 42 days for those not at risk.
Employees with lower exercise levels lose up to two weeks of work compared to those who are more active and eat a better diet.
The data indicates that UK employees face a range of health risks: 37% are physically inactive, 56% eat an unhealthy diet, and 23% are obese (58% are overweight). Meanwhile, 10% suffer from anxiety or depression. Combined, these risks affect nearly all UK employees, with 81% encountering at least one lifestyle health risk, and 96% suffering from at least one lifestyle or clinical risk.
How can the workplace impact our health?
Organisations can adopt a personalised approach to meet different needs.
For example, 46.5 is the average number of interventions offered by employers. While 70% of employees are aware of these interventions, only 25% have used them. The good news is that 85% of staff who did use the interventions found them useful!
The data shows that some employees lack motivation to improve their lifestyles, such as addressing smoking, diet, and alcohol intake. However, this is where interventions can make a significant difference.
How can health insurance help?
Employees with access to health insurance can be more active. For instance, the Vitality Programme helps 8% more employees reach the recommended exercise guidelines. They are also at a lower risk of depression (11% lower).
The data reveals that employees on a Vitality business health scheme are happier. This often comes down to feeling that their employer cares, with fewer experiencing lower job satisfaction (13% less).
On average, this results in an additional two and a half productive days per year for employees!
Take our quick poll: Do you feel supported by your workplace or health insurance policy? Hit ‘reply’ with a, b, or c…
a. Yes, my workplace and health insurance are great!
b. I think my workplace and health insurance could be improved.
c. No, my workplace and health insurance are terrible! Can you help me get better support?
Critical Illness Cover is something we are passionate about. Protection is crucial to safeguard against future uncertainties. We understand this isn’t a topic you want to dwell on, so we’ve made it easier for you!
You might have heard that Critical Illness Cover is too expensive or that insurers are unlikely to pay out. However, we have various solutions to address these concerns. We work within your budget to find a policy that suits your needs and only collaborate with insurers who genuinely support you.
Or perhaps you think you don’t need it because you are too young or don’t have a mortgage? But have you considered how you would manage financially with an income that might be affected, potentially for the rest of your life?
How does the process work?
First, we can send you a list of conditions for each insurer to clarify what you’ll be covered for. This ensures everything is clear and straightforward. Secondly, we’ll simplify any medical jargon that might be confusing. We’ll explain how insurers might decline applications, exclude certain conditions, or increase premiums based on your medical history. This is why disclosing accurate information about your health is crucial when applying for cover.
Options
If you are seeking cover, chat with us directly. We can conduct the research for you and present several options, including different levels of affordability. You’ll be actively involved in the decision-making process, receiving bespoke advice tailored to your needs.
Even if you might not qualify for Critical Illness Cover, we can explore alternative options such as life cover or cover for your children or pregnancies.
Real-life scenarios
You might have heard about insurers not paying out, but this is usually due to non-disclosure or failure to meet policy definitions. We’ll assist you in ensuring this doesn’t happen, as in reality, insurers pay most claims. Only a small percentage are rejected, and always for valid reasons.
Moreover, you don’t need to have a terminal illness to make a claim. For example, did you know you can claim for conditions like having skin cancer removed? Even a hospital stay can be covered!
Critical Illness Cover addresses the living side of life. You do not need to be dying to benefit from a payout.
Our role as advisers is to help you understand the ins and outs of Critical Illness Cover to protect you and your family. Contact us today to discuss your options!
Have you been saving and working hard to provide your children or grandchildren with the best education, only to find that fees have risen? Sound familiar? Did you know you can use equity release for private school fees?
We’ve outlined three types of mortgages that suit homeowners with different needs. Once you’ve read through them, get in touch for a detailed plan on accessing equity release.
A Lifetime Mortgage
If you are 55 or over, a lifetime mortgage is worth considering. This popular type of mortgage offers access to the equity in your home.
Some schools offer a discount if you pay school fees as a lump sum, while others promote termly rather than monthly payments. A lifetime mortgage allows you to take a lump sum, a fixed monthly amount, or access funds as needed.
This type of mortgage helps you support your children or grandchildren with their long-term education. There is no fixed term, and the lender does not expect the loan to be repaid until the youngest homeowner passes away or moves into long-term care.
Typically, the mortgage is repaid from the property's sale. Interest can be paid monthly or allowed to accumulate, meaning no monthly payments are required.
School fees are likely to represent only a portion of your property’s value, meaning you would need to release only a fraction of your property's value. This can make it easier to manage the financial commitment effectively.
This is a lifetime mortgage. To understand the features and risks, please ask for a personalised illustration. Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice.
An Offset Mortgage
Offset mortgages can make school fees more manageable, whether you pay them monthly or termly.
An offset mortgage links a savings account to your mortgage, offsetting some of the cost of your monthly mortgage payments based on those savings. For example, if you have a mortgage balance of £200,000 and savings of £50,000, you would only pay interest on £150,000 with an offset mortgage.
This is a good option if you have funds tied up in investments or rely on commission and bonuses for a significant portion of your income. This way, you can access funds for school fees while reducing the regular cost of interest payments.
A Second Home Mortgage with 90 Days’ Rental Allowance
If possible, you may choose to purchase a second home near your child’s school. Based on school term dates and holidays, you can split your time between the two properties.
Some lenders allow you to rent the property for up to ninety days a year under the terms of a second home mortgage. This type of mortgage can require as little as a 10% deposit, with affordability checks based on your income rather than rental income.
Rates are competitive right now. Let us work out the best rate for five-year fixed-rate loan for you.
For more details on using mortgage finance to pay for school fees, reply to this email to find out more!
Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.
As we all know, predicting which election promises will become reality is no easy task! However, we’ve outlined a few pointers to help you understand how the new government might bring changes that could affect you.
Labour has come to power with a landslide majority, while interest rates remain high, and house prices and property sales continue to rise. Sir Keir Starmer delivered his first speech outside Number 10 after Labour's general election win, emphasising the need for more affordable homes.
Labour has announced that stamp duty will revert to £300,000 from the current temporary level of £425,000 in April next year. On the other hand, Labour has stated it will make it easier to secure a deposit through a 'Freedom to Buy' scheme. Prior to the election, labour pledged to help 80,000 young people onto the housing ladder over the next five years and to a version of the current mortgage guarantee scheme – due to expire in June 2025 (details to be confirmed).
Similar to the mortgage guarantee scheme, Labour plans to incentivise lenders to offer high loan-to-value (LTV) mortgages by acting as a guarantor for prospective first-time buyers who cannot afford a large deposit.
For overseas buyers, the Labour manifesto proposes implementing an extra 1% stamp duty surcharge. Currently, 68,800 individuals living in the UK are non-domiciled and do not pay tax on their worldwide income.
Regarding the non-domiciled rules, Nimesh Shah, Chief Executive of tax advisory specialist Blick Rothenberg, commented: “There has been more backlash than expected, and there is a suggestion that Labour may be willing to engage in a new policy approach, which could mean the introduction of the new regime being delayed. However, we don’t yet know Labour’s stance on improving the current proposals, which are in need of substantial revision.”
Labour has also pledged to deliver 1.5 million new houses over the course of the next Parliament. However, there are challenges with green belt issues and strict planning departments.
Housebuilding is demand-led and driven by economic cycles, rather than the planning system. Labour intends to take early action to change the National Planning Policy Framework and restore housing targets. However, private house builders will still be expected to deliver homes based on demand and at market value.
The Labour Party plans to revive the abandoned Renter’s Reform Bill, aiming to end no-fault evictions and also to end bidding wars.
They are, however, adopting a more pragmatic approach to leasehold reform, pulling back on earlier plans to abolish the leasehold system within the first 100 days.
While Labour has ruled out a formal “Wealth Tax,” revenue will be raised through other means. It is anticipated that private schools will be charged VAT (likely from September 2025), and we are yet to see how other taxes might rise.
As with any new Government only time will tell what will come next for our collective finances.
