Consumers urged to "pay attention" to long-term savings by Finance News Bulletin
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Published: 20/11/07
There can sometimes be a "head in the sand mentality" among people when it comes to economy for retirement , it has been claimedRichard Sheppard, skull of pensions for AWD Chase De Vere, suggested that populace often get sidetracked by mortgage repayments or paying for a novel car rather than "paying attention" to economy for the futureAccording to Mr Sheppard, it is of "real concern" that there are approximately two million households coming to the finish of their fixed-rate mortgage deals over the next six months"I think those persons are going to be the ones that will be either reducing or suspending retirement fund contributions, to fund their increased mortgage payments," he commented
Earlier in the day, Matt Ward, principal consultant of pensions and wealth management at Defaqto, warned that many populace are "sleepwalking" into their retirement , without making sufficient financial
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Should you believe the property doom? - Published:16/12/07
Bad news is flowing thick and fast for the possessions market but are there any reasons to be cheerfulto come for the plunge: UK property's unalterable rise against the odds has been compared to Wile E Coyote leaving off a cliffThe industry has issued a grim caution on mortgage lending What does it mean for you Editor's commentWith feeling appearing to have turned on possessions, pundits have been queuing up to emphasize how overpriced the UK market is and many have predicted heavy falls in the near futureThis is Money rounds up what the economists and experts are proverb and investigates whether there are any reasons to be cheerful amid the doomMorgan Stanley's leader UK economist David Miles has warned that prices could fall 10% next year The former adviser to Gordon chocolate has warned that the decline will arrive as house cost rises tail-offIn a report, Mr Miles says that more than half of the go up in house prices has been fuelled by the speculation that prices would carry on to rise fast, with the homebuying population expecting rises of 10% over year But he adds that it is impossible to predict when the fall could occur and that it could happen at any point over the next two yearsHe said: 'I don't think house prices lessening is in any sense a bad thing There's a natural tendency for populace to view it as bad for the economy, as harmful But I don't think that's correct We have a problem of affordability of housing with populace struggling to get into the market'assets Economics, led by economist Roger Bootle, says prices will fall by 3% in 2008 and by the same amount in 2009, captivating thousands off the value of a home The former chief economist at HSBC and one of the store of England's committee of 'wise men' under the last Conservative Government, says that price waterfall seen in the US, Ireland, Spain and France will be frequent in the UK, where economic circumstances are very similarWriting in the Telegraph this week, Mr Bootle said that the credit chomp is not the root cause of what is leaving wrong in the housing marketplace Figures show decline in new buyer inquiries began at least six months before, as did the downward move in sales There are two basic causes of the housing marketplace slump These were the five interest rate hikes between August 2006 and July 2007 and that 'property has become too luxurious What goes up too far must come down - and often too far as well'The International financial Fund has said that British possessions is overvalued by 40% and the credit crunch is likely to have a 'sizeable crash' on property pricesA report for the worldwide finance monitor said house-price rises in the UK, Ireland and Spain have been surging even faster than those in the US had before collapse across the Atlantic – send-off the European countries particularly vulnerable to market volatilityIt said in the UK home prices have soared in relation to incomes to place at about nine times yearly average earnings - up from only about five times in 2001Property sceptics are predicting a serious slump in the accommodation market, but will there be a crashBritish home prices are overvalued by about 30%, according to a account by HSBC A account for the bank said: 'There is around 30% of the current home price level that cannot be explained'It said the fast inflation in house prices over the past decade in the UK, which has seen prices treble, began as a rational response to the better financial climate that followed independence for the Bank of EnglandHowever, the report says that - opposing to suggestions - the boom since 2000 has not been driven by a shortage of supply as rents have not risen considerably, but by people buying in the hope of continued price inflationinvestigate by investment bank Dresdner Kleinwort claims that UK possessions as measured by affordability is the most expensive it has been since 1948, when there was a serious post-Second earth War housing shortage Its analysis says the cost of the average home is currently 723 times standard household disposable income and the ratio has only been senior in the late 1940s – drumming a record of 916 times in 1948Spreadbetting firm Cantor Spreadfair says that metropolis punters are calling a fall of around 15% for London home prices in 2008 – with bets of £2m to £3m being wageredThe market has shifted dramatically in new weeks, according to Cantor, which said that punters are suggesting a drop of 10% for the UK as a whole It said that people have been backing prices to drop with some taking exposure of several million pounds The solid allows punters to bet on the Halifax house cost index, which currently has the average UK cost at £194,895 and London cost at £320,000Some property pundits have been frequently calling a crash since the turn of the decade These predictions escalated to their uppermost level in 2005 when the marketplace slowed down – since then the average UK house has risen in value by more than £30,000 – from £163,000 in June 2005 to £195,000 in November 2007, a go up of 20%Most reports on house price predictions inevitably go for the headline figure and even the more bearish of economists be inclined to state that a gradual and prolonged hold up is more likely than an all out crashThe difficulty with economists and City pundits is they often fail to take into explanation the emotional aspect of some thingsThe unalterable rise of UK house prices above and beyond obvious supporting factors has baffled many This go up against the odds led the UK accommodation market to be compared to cartoon character trick E Coyote running off a cliff and staying aloft long after he should have tumbled, in an similarity in The Business magazineMany pundits suggest that once the marketplace turns, populace will stop buying homes and wide scale selling will take place, particularly in the buy-to-let market This fails to take into account the fact that in Britain populace have a very strong desire to own their own home and many will see a fall in prices as a time to buy Meanwhile, the buy-to-let market owes a huge deal of its success to the public's desire to put aside for retirement and mistrust of pensions and investmentsMany landlords who see properties as their pension and have owned possessions for more than two existence, will have seen good capital gains and rents contentedly paying their mortgage They are likely to hold on to their properties with the aspire of riding out a slump and making further gains in years to comeNeither of these factors will sustain such an overrated market but they could cushion the fallpossessions in the UK is overvalued We have to pay too much for our homes, too much to move home and the baby boom age group that benefited most from rising prices is now having to pay for its children to be able to have enough money their own property The only winners from increasing house prices are mortgage lenders, who subject bigger loans and rake in more in interest paymentssheer falls in house prices will hurt those who have bought recently, but a hold up would be beneficial for a stable market in the longer term As long as homeowners can afford their mortgage payments they should be clever to sit tight and wait for prices to stabiliseMore affordable accommodation and the end of bricks and mortar being seen as a money cow would arguably be a good thing for the UK and its economyI consideration it was £13 trillion including mortgages CH4 despatches are saying individual debt is £8k per mature in the UKWorking as a mortgage consultant and dealing with plenty of lenders both prime and subprime they are all stating it's almost a no go for populace with poor credit history and I have to agree Deals being pulled now before exchange, stupidly low valuations on houses It is going to be a very very tough marketplace next yearGeorge Geee are you sure about 13 trillion unsecured debt That averages out at about £22k per person including all brood so an average house of 2 parents and 2 children are almost £100k in debt not including their mortgage I doubt it, no one I know is anything like that in debt Anyway, people responsibility the BoE and administration for the state of the economy but look in the mirror no one forced us to use in the shops and in the bars and restaurants, we did it ourselves, and if we weren't trying to one up each other with the size of our houses the housing marketplace wouldn't be in such a state either, it's all our own greedOne day first time buyers and those who want to buy possessions as a home will form into a unified organisation that will be able to lobby the government to 'make' homes reasonably priced, or suffer the political consequencesLegislation should be changed to make it more hard for those investing in property because opposed to primary home) in the form of higher taxesI don't have a difficulty with needing to put aside and work hard to get a home, but I do have a problem with homes which are outright unobtainableWith homes priced at 7/8 times standard salary, the put required is not a few thousand pounds, but several years salaryFirst time buyers are many and a growing population, we can create our voices heard Sooner or later politicians will realise this, make housing reasonably priced or we will vote you out of authority (or not vote you in)Well having had a seem at nethouseprices and land registry data, I can still see that most houses that are up for auction in areas that I want are still asking for more than has ever been paid in their areas Obviously they are looking for 'new' monied populace to be moving in to give good reason for these asking prices that never been achieved The 20 houses have been up for sale for between 9 and 18 months so clearly the emotional crutch is the previous wife refusing to move and the previous husband refusing to be left with nothingThe UK will be like other countries in that the debt will be passed on to other members of the familyWhat will retired populace do with no savings and no company retirement fund and a joke of a state pensionI sense the MPC and BOE will end up over reacting and dropping tax too much and thus causing another credit boomAs others have said 025 % reduction when mortgages are for 2 years means some will fail to spot the boat and be on bad deals for the next 2 yearsThis credit crunch means clientele must reduce debt and good customers will be appreciated and the growth of local building societies will occurNorthern Rock has put a discontinue to future carpetbagging and the future will be rough for the accommodation marketHouse prices cannot rise forever we should all be acquainted with that, so what's wrong with a little breather and a small drop in prices, it may allow a few more onto the accommodation ladder, if the so called experts would stop scaremongering and forecasting fate and gloom just because theres a little drop in house prices then we would all be better offAt the end of the daylight hours the normal person needs to save in order to get onto the housing market populace believe they have the right to own a house Even when they cant save a couple of thousand It doesn't work similar to that I have no sympathy for any one moaning they cant get on I was only 18 when I got onto the housing market Being a landlord is the way onward for investing in your future Think extended and hard people for wishing a crash Do you really think the banks will loan money to people in a bad market No is the reply So you still wont get onto the housing marketplaceLike a comment said above, why is a very small drop in house prices seen as a awful thing 999% of this country's population want a reduction of home prices as people want to move up the ladder and have more space to have a family etc FTB want hors d'oeuvre homes a flat or whatever but at there prices No method Unless mammy and daddy are wealthy and for the vast majority of us that means no this is a non starter now I have erudite a lot about the economy, politics etc from this web site and don't actually post a lot of comments (spelling a bit dodgy) but I sense this administration are starting to look like tories 'look after the rich and material the poor' But I'm afraid they are all actually tarred with the same stick I pray for a property correction, its the only method to sort out this messA house is only worth what someone will pay for it What has happened to a house being a home It is common in Spain for mortgages to be passed onto children when they inherit It is also common for a purchaser to take on the mortgage when buying a propertyWhere we find ourselves with overpriced accommodation in the home and overseas markets is down to a culture of unfettered and improperly regulated loans pure and easy The spending spree on unsecured loans (thats credit card money owing to the uninitiated, and nothing to do with mortgage debt)in the UK is about £13 trillion Think that tells you all you need to know about the "I want it now but cant afford it" culture in Britain We are in serious trouble unless the mind set of the huge British public when organization their finances is changed Cutting interest rates unluckily by Governments is clearly politically motivated not good sense It hits those who are truly prudent and exist within their income, and sends the worst and completely wrong message to those who either continually over extend themselves, or abuse the system by having no meaning of paying back debt wounding interest rates is just delaying the inevitable pain thats coming and delaying re-education of the massesOf course the prices are going to fall, maybe upto 40%, I keep in mind the early '90s, but this time will be much harderchoose a loan word 12 months (1 year) 24 months (2 years) 36 months (3 existence 48 months (4 existence 60 months (5 existence 72 months (6 existence 84 months (7 existence 96 months (8 existence 108 months (9 existence 120 months (10 years)Please 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Read More: Should You Believe The Property Doom? >>Sipps to be hit by new way of valuing shareholdings - Published:15/01/07
All occasions are London occasion Search News in the FTcom siteSearchSearch Quotes in the FTcom siteQuotes Your moneyBreadcrumb follow navigation:FT house > Your moneyEDITOR’S CHOICEWatchdog says companies understate obligationsBT pension fund in fundamental shake-upHermes sets a benchmark for UK pension fundsFSA tells ministers it will be handicapped by too many responsibilitiesFSA faces official review of its recordLATEST YOUR MONEY STORIESWorkers who contract out to take pleasure in greater flexibilityPut your feet up in a place in the sunMore than a leg up for cash-strapped first-timers A middle house offers a place to shelterStretched customers stand up banks’ incomePound teeters near the topCustomers can click on advice beyond compareStellar presentation that could become dimmerWell-heeled tread a path to the hock shopHow landlords can avoid that 3am callA change in the method pension providers are required to work out the value of shares in their clients’ portfolios will lead to delays and extra costs for no obvious advantage, according to a leading provider of personal pension schemesThe new calculation formula, due to take result from October 6, could affect up to 150,000 self-invested personal retirement fund (Sipp) plans with assets calculation about £30bn, said Andy Bell, supervision director of AJ Bell, a leading Sipp administratorHM Revenue & habits is insisting on moving over to what is recognized as the “quarter-up” method of valuing share holdings in people’s portfolios from that dateThe quarter-up means is used for the purpose of probate, valuing possessions in a person’s will The cost is based on the bid cost of a share plus one quarter of the dissimilarity between the bid and the offer costMost Sipp providers use a mid-market cost, which is intended automatically by stockbrokers, for valuing shares Quarter-up prices are not intended by the software used by most stockbrokers so would have to be worked out by hand“This is quite frankly ludicrous,” said Mr Bell “The government is annoying to shake off a reputation for hitting business with crimson ribbon The changes to systems will cost millions across the investment industry and all for what”The consequence will be to delay the calculation of the worth of share portfolios by up to 10 days and add £25 or more to the cost of calculating the value of a portfoliosplit valuations are characteristically required when a person retires and needs to calculate the value of their retirement fund fund and of any tax-free lump sum to be engaged from it People approaching retirement may find that their own calculations differ from the retirement fund adminstrator’s calculation based on the quarter-up methodValuations are also required if someone needs to buy a property using money from their pension fund They may only borrow up to 50 per cent of its valueA assessment is also necessary if the beneficiaries of a small self-administered pension system (Ssas), frequently used by small commerce owners to build up a pension, decide to make a loan to their corporation“What is the point of this” asked one private customer stockbroker with a large number of pension fund customers “It is only being done because it is the method used for probate Can they demonstrate that this serves any purpose at all – other than for tidiness“It will make only a decimal point of difference to the worth of pension funds but for us to provide a quarter-up valuation will be enormously costly and the client will finish up paying for it”The requirement for quarter-up valuations was introduced in the Finance Act of 2004 and had originally been due to take effect from April 6 – A-day – the day when pensions “simplification” took effectBut after lobbying by the pensions manufacturing, the Revenue granted a six-month change period during which time it allowed pension finance administrators to continue using the bid price, or a computation based on the mid-price minus 1 per cent These calculations could be approved out automaticallyThe Revenue said the manufacturing had had 2½ years to adapt to the change which was “ample chance”Last-minute negotiations over relaxation of the new rule are continuing “I have been in conversation with the Revenue on this subject and they come into view genuinely sympathetic to our dilemma,” supposed Mr Bell “ Hopefully this will translate into a conquest for common sense”RSS news feeds = requires subscription to FTcom* smallest amount delay 15 minutesAll times are London timeFT HomeSite mapContact usHelpAdvertise with the FTPress enquiriesStudent offersFT ConferencesFT Research CentreCorporate subscriptionsFT collection Copyright The Financial Times Ltd 2006 "FT" and "monetary Times" are trademarks of The monetary Times Ltd solitude policyTermsEquity ISAsEquity TradingSaving for your ChildrenInvestment TrustsFourth column.
Read More: Sipps To Be Hit By New Way Of Valuing Shareholdings >>Directors 'have 1bn pension pot' - Published:14/11/06
Directors at the UK's top 100 companies have built up a pensions pot value almost £1bn, a report has foundOn average, such directors can give up work at 60 with a pension worth almost £3m, paying out £168,000 a year, investigate by the Trades amalgamation Congress (TUC) foundMeanwhile, the proportion of executives in final pay schemes remained above 80%, while many firms had closed such schemes for its staff, the TUC additional"Britain's boardrooms and commerce lobby groups have failed to tackle upstairs-downstairs style company pensions," supposed TUC general secretary Brendan Barber"If bosses were in the same scheme on the same terms as employees, they would still build up massive pensions compared to employees, but they would be fairer It would also help reduce their company retirement fund deficits"According to the report, final salary pensions build up almost two times as fast for directors as for ordinary employees - as a consequence it takes staff an average of 40 years to reach full retirement fund compared to 20 years for directorsThis research gives the recline to the argument that bosses can't afford to contribute to polite retirement fund schemesIt also found that companies paid in up to 35% of salaries into directors' pensions, compared with the average for all employees of 66%More than three quarters of the companies surveyed supposed they allowed executives to retire on a full pension at the age of 60"This investigate gives the lie to the argument that bosses can't afford to add to decent pension schemes - they'd now prefer to keep them to themselves," said the skull of the Rail Maritime convey Union (RMT), Bob Crow"All our experience tells us that it is workers who are in trade unions and are ready to fight who will keep and improve their workplace retirement fund rights"The TUC's annual survey - which began in 2003 - comes just days after similar findings from the work Research section (LRD)LRD accused executives of enjoying "super enhanced" pensions as labour faced up to a tough retirementIt found that bosses at the UK's top firms retire on a pension worth at least 71 times that of the basic condition pension for a wedded couple - with at least 112 directors currently entitled to a pension value at least £200,000Annuity reform Women 1 Women 2 retirement fund rights Divorce Work pensions Lump mathematics Pension Credit Frozen pensions Shortfalls Overseas pension Small retirement funds Tax and retirement funds Pension repair Made simpleState retirement fund With-profits.
Read More: Directors 'Have 1Bn Pension Pot' >>