Radio Advert

My first Radio advert

LOL – this is well outside my comfort zone, but, nothing ventured, nothing gained!

Recession Tips – in the Viz style

DON’T waste money on expensive iPods. Simply think of your favourite tune and hum it. If you want to “switch tracks”, simply think of another song you like and hum that instead.

HOMEOWNERS: Prevent burglars stealing everything in the house by simply moving everything in the house into your bedroom when you go to bed. In the morning, simply move it all back again.

SAVE a fortune on laundry bills. Donate your dirty shirts to Oxfam, they will wash and iron them and you can buy them back for fifty pence.

DON’T waste money buying expensive binoculars; simply stand closer to the object you wish to view.

SAVE electricity by switching off all the lights in your house and walk around wearing a miner’s hat.

HOUSEWIVES, the best way to get two bottles of washing-up liquid for the price of one is by putting one in your shopping trolley and the other in your coat pocket.

OLD telephone directories make ideal personal address books, simply cross out the names and address of people you don’t know.

SAVE on booze by drinking cold tea instead of whisky. The following morning you can create the effects of a hangover by drinking a thimble full of washing up liquid and banging your head repeatedly on the wall.

OLD people, if you feel cold indoors this winter, simply pop outside for ten minutes without a coat, when you go back inside you will really feel the benefit.

CAN’T afford contact lenses? Simply cut out small circles of cling film and press them into your eyes.

WHY pay the earth for expensive jigsaws? Just take a bag of frozen chips from the freezer and try piecing together potatoes.

SHOPPERS, when buying oranges, get more for your money by peeling them before taking them to the counter to be weighed.

MIX tea with coffee, and leave in the fridge to cool. Hey presto! Toffee!

MAKE your own inexpensive mints by leaving blobs of toothpaste to dry on a window sill. Use striped toothpaste to make humbugs.

85% mortgages

Through the – well, do we call it a boom now? 100% mortgage and higher were commonplace and a ‘good’ deposit was 10% (the threshold where the better rates started appearing).

There were further thresholds at 15% deposit and 25% deposit and occasionally at 40% deposit, but that was unusual.

Since the crunch, 25% deposit has been pretty much essential and 40% good. Mortgages are available for those with smaller deposits, but at a premium.

C & G have been at the mainly 75% end of the scale for a while – but they are releasing products now at 85% range and a further set at the 90% range. They aren’t brilliant rates – above 6%, for the 90% products, but hey, it’s a start.

This is good – this could signal the start of competition for the low deposit end of the business and that is another sign of common sense starting to overcome panic in the mortgage market.

It also seems to be a signal that some people think the worst of the drop in house prices is over, and while it may not be totally bottomed out, it’s close enough for more lenders to take an interest in 90% lending.

Things an IFA can do.

There are 3 categories to my work and I have created a blog for each.

Independent advice will save you money

Independent advice will protect your money

Independent advice will make you money

I hope you find them useful.

Adrian

IFA, IFA Southampton, Utility Bills, IFA Hedge End, Utility Warehouse, IFA ISA, IFA income protection, redundancy insurance

Lenders interest rates

Well, it seems that most lenders are doing the right thing on interest rates – 4.99% seems to be ‘about right’.

Abbey have influenced this, although we are all forgetting that they put their rates up by 0.5% earlier this week and also didn’t pass on the earlier 0.5% drop, so they had 1% in hand – obviously OK for them to drop the ‘full 1.5% to be fair to their customer’ Forgive me if I seem a bit cynical.

Looking back through by business register, I am pleased that many customers have tracker products, although if you look on a longer view I don’t think fixed rates will be all bad – there are going to be problems after the recession is averted over and they may be well be cured with higher interest rates.

And, in other news – I had a letter today from one of my credit cards saying they were going to put my interest rate up to something ridiculous. I was annoyed and threw away the letter. I then got very annoyed and got the letter to phone them and winge – I read the letter while I was on hold, it turns out that they were putting the interest rate wup within the terms of clause such and such and carried on like so for several paragraphs.

Tucked away in the final paragraph – “if you do not consent to this, please phone us within 30 days”.

Hmmm – wonder how many more of those letters I’ve missed over the years…

1.5% cut in B of E base rate – shock!

Well, that was a surprised and it’s being talked about everywhere.

I’ve had e-mails this afternoon from almost every lender stating that they are withdrawing all their tracker products, although I did swap one lucky client onto the outgoing products with minutes to spare – most lenders gave an hour or so’s warning to act, with TMW the worst at 9 minutes and Woolwich second worst at 20 minutes.

I’m on a fixed rate  oh well, it was the right thing to choose when I chose it.

What does this mean for people?

Well, savers will suffer more, although ISA’s still offer some good rates and stock market based ISA’s will be exciting for those with an appetite for risk – in the future I bet people will consider this period as a great buying opportunity.

Borrowers on fixed rates – no chnage

Borrowers on variable rates – no news yet, although C & G sent an e-mail out yesterday saying they’d honor the drop.

Borrowers choosing a new mortgage now – well, no answers, after todays list of product withdrawals, it’ll be better to wait a week or so. But, there are decent fixed rates available, but they are decent by last weeks’ standards.

The people who will really benefit are existing tracker mortgage customers and businesses – commercial finance is often set up as a margin over BBR. That will aid ongoing employment and will help many more people stay in jobs – and that is the real benefit. Sadly, no employer is goin to say ‘John, you’d be redundant if it wasn’t for my business finance getting cheaper’ so in general we’ll carry on being a bit disatisfied about rate cuts not being passed on properly and never know the true benefit.

The other aspect to this is that amongst the chatter is an overwhelming view that the cuts won’t be passed on – so the banks will know it’s kind of expected, so they will be judging how much they can get away with – and we’re all saying ‘they’ll only pass on a bit of it, that’s what they’ll judge is OK – a self fulfilling prophesy.

Fingers crossed it starts working out soon!

Changes to State Benefits for ill people

So, obviously you are strong, maybe even immortal.  So am I.

So are most people. I’ve just turned 40, and do you know – I’ve started to get a few aches and pains and I cant’ throw off a cold like I used to.

So, unless I am lucky I’ll probably have time off work for health reasons – actually, i know I will, I have a nose operation and a foot operation. The nose op will put me off work for 2 weeks. That’s handleable. The foot op will put me off work for 2 weeks…’if thingsgo well’. Three months is the downside. That’s awkward.

So, clearly the credit crunch isn’t the only thing that could have an impact on my earnings and it’s the same for you.

But, the state will help you if anything long term happens. Right?  Well, possibly, but not as much as you’d hope.

The new Employment and Support Allowance (ESA) replaced Incapacity Benefit last month. That’s the state benefit you need if you are unable to work owing to accident or sickness.

It’s a bit rubbish though – much rubbishier than you need although better than nothing. Just. There is a real ablancing act for all state benefits – they don’t want them to be so good they encourage you to be ill and discourage you from going back to work, so the ESA is very basic.

For some employed people, you may get actual sick pay – maybe 3 months full, followed by 3 months half pay. These are generally large companies and you should check what you do recieve, it can be quite sobering. But, more than likely, you won’t have any sick pay benefit so what happens then?

Well,  you will be eligible to receive Statutory Sick Pay after four days of illness. Your employer has to provide you with a minimum of £75.40 per week for 28 weeks.  As an employee you are able to apply for ESA after 28 weeks.

If you are self-employed then you can apply to be assessed for ESA after the first four days of any illness.

If you apply for ESA you will be tested for eligibility during the 1st 13 weeks.  During this period, you will receive a benefit of £60.50 per week (or £47.95 if you are under 25 years old). This assessment is based on your ability to work rather than the extent of your illness or injury. If you fail the assessment, the benefits stop and you will have to be considered for Income Support instead.

In addition to qualifying for ESA benefit payments from the state, this assessment will also place you in one of two categories which will determine the level of benefits you receive.

If you are placed in category one, there is a reasonable expectation that you will be able to return to work again. The basic allowance in this category is £60.50 per week and there is also a further allowance, known as a Work Related Activity Component (WRAC), of £24 a week. Payment of the WRAC is conditional on you attending regular back-to-work interviews which aim to measure your progress against a back-to-work programme.

If you are placed in category two then you are severely incapacitated and not expected to return to work again in the future. The basic allowance for this category is also £60.50 per week and there is also an additional Support Component of £29 per week. You might also qualify for other state benefits, such as Disability Living Allowance.

Regardless of the category, benefits continue to be paid for the full duration that you are unable to work. This could last to state retirement age, if necessary.

With the ESA being introduced, you need to think about how much income you would need to meet your committed expenditure if you were unable to work.

Take a look at your monthly budget and remove the discretionary expenditure to come up with a realistic figure. It is the shortfall between the ESA payments and this figure that you need to plan for – either with sufficient savings that will last for a sufficient period of time, or through insurance.

Income replacement Insurance is often cheaper than you’d expect. Actually, it’s often so cheap it’s a no brainer. Not many people have it, but that’s not because it’s expensive – it’s for other reasons!

So, it’s work talking to and Independent Financial Adviser and asking about income protection. If you have accident sickness and unemployment insurance with your mortgage, it’s worth getting a comparison of removing the accident/sickness part and replacing it with income replacement insurance.