NewsJanuary 2010I'm delighted to report that I am starting my own business, building on my experience to offer financial advice in a special way. I want to cut down on unnecessary paperwork and help clients to manage their money as easily as possible. I want to be more responsive to client requirements, while continuing to give a first-class service Please note my new telephone numbers: 01202 842795 or 0775 943 7960. My new email address is helenkifa@live.co.uk. September 2009At the beginning of September, the OECD forecast that the British economy will contract by 4.7% in 2009, while the rest of the G7 (developed) economies will contract by 3.7%. So that's not good news for us. Unemployment is very high in the Eurozone and America, and the OECD also said that demand will be moderate, and the global recovery will be weakened because of it. Positive indicators include improvement in overall financial conditions, and 14% GDP growth in China. Interest rates are seen as unlikely to rise until at least mid-2010. Apart from the OECD report, investors in commercial property are beginning to see rising valuations. Some institutional investors (e.g. pension funds) are now going into this sector because they think the worst is over, and want the potential for growth and income. They also think that the sector is offering good value. Over 80 new investment funds have been launched in the UK since January. I think that investing in a brand-new fund can often provide good returns, as it may be more flexible than a large existing fund. It may appear to be more risky than going into a fund with an established performance history, but the risk is lessened if the fund manager has a good personal track record. ISA CHANGES FROM 6 OCTOBER ISAs have been around for 10 years now, and on 6 October the limit for people who were born on or before 5 April 1960 will rise to £10,200. This means that if you are age 50 or over and have already put the full allowance into an ISA in this tax year, you can top it up - by up to £3,000.
You can still only have one cash ISA and one stocks and shares ISA in each tax year. The maximum amount into cash is now £5,100 in a year. Also as before, money in a cash ISA can be transferred to a stocks and shares ISA, but not the other way round.
If you have quite a lot in cash ISAs, and don't like the current interest rate, you can consider taking a bit more risk by moving some money into the stockmarket to benefit as the global economy recovers. Of course, all the usual risks will still apply, and there are still commentators who think it could be a 'double-dip' recession. July 2009Heading West Heliting Financial Services Ltd.has been taken over by PFM Associates Ltd., based not very far away in Poole. I am trying to settle in as quickly as possible. Post addressed to Heliting is being forwarded, and emails are being forwarded for the time being. My hotmail address has not changed, and as before I will always respond to messages as promptly as possible. PFM Associates Ltd is a very professional, well-managed company, and I hope to work very happily there for some time to come. I do not anticipate any significant changes to the way I work, except that I will take advantage of the Wealth Management Service to help clients when appropriate. For further information, the PFM website is at www.pfmassociates.co.uk and see the details in PFM Associates Ltd. May 2009The Budget was not particularly exciting, unless you enjoy the arguments about who is being the most optimistic, realistic or pessimistic about the UK economy - or unless you are earning over £100,000 p.a. I think most of us were expecting increases in taxation, because of the huge amounts the Government has borrowed to try to shorten the recession. There are always disputes about how many people will be affected by the Budget changes, and this time is no exception. Most of the key changes do not come into effect until 5 April 2010. However, some high earners who have their own unincorporated companies with financial years starting on 1 May will find themselves paying the new rates of tax effectively from now. With higher tax on share dividends and trusts, as well as for high earners, the effects of this Budget could reach further than it seemed at first. If the limits for the higher taxes do not change, many more people will be caught in a few years' time. This is all the more reason to make good use of your ISA (Individual Savings Account) allowances - especially from 6 October if you are aged 50 or over - but why do there always have to be complications tagged on the end of every bit of news? There is good news for grandparents of working age who look after grandchildren so that the parents can work. As long as the childcare is free and for at least 20 hours a week, the grandparents will be able to earn National Insurance credits toward their state pensions for each year that they take out of the labour market to look after grandchildren aged 12 or under. Sadly, this does not take effect until April 2011. The seminars that I gave in conjunction with D'Angibau LLP were very well received, and it was good to see so many people interested in learning more about recent changes to Powers of Attorney, Inheritance Tax and the other issues. If you would be interested in coming to a future seminar, do let me know. I have now had two questions published in the Ask The Experts section of the Financial Mail on Sunday, and hope to have more before too long. March 2009RETIREMENT - CHALLENGES AND OPPORTUNITIESI am teaming up with well-known local solicitors, D'Angibau LLP, to give two free seminar to people who are in or approaching retirement. The topics will include: - How to arrange your affairs at retirement
- Powers of Attorney (especially the new Lasting Powers of Attorney)
- Things to consider if you have property abroad
- Releasing Equity from your Home
- Paying for Long Term Care, if needed
- Inheritance Tax planning (including the latest changes).
The seminars are taking place at 2pm and 6pm on Tuesday, 28 April, at Salterns Harbourside Hotel. Light refreshments will be provided. There will be no follow-up unless requested, and no selling of any financial or other products. If this would interest you, telephone me on 01202 551664, or email me: helenkanolik@heliting .com I look forward to hearing from you soon. THE END OF ANOTHER TAX YEARIf you have been thinking about making any pension or ISA contributions, using your annual Inheritance Tax allowance of £3,000, realising any capital gains or losses - don't leave it too late. Administrative delays could cause the deadline to be missed. Life assurance and investment companies may accept last minute applications literally up to the last minute, but it is advisable to check what the procedures are. If you are selling something, it could take a while, so don't cut it too fine. If you have to make any declarations to HMRC, or send in any forms, give them plenty of time, and send them recorded delivery. That way, you will have time to send another batch if the first one goes astray in the post. RECOGNITION OF MY EXPERTISEI have been asked to be on the 'Ask The Experts' Panel of the Financial Mail on Sunday, and I'm flattered to be considered a suitable candidate. I don't know when there will be a question for me to answer, but it is nice to be asked. This has come about because of the articles that I have contributed to over the past few years. January 2009An Opportunity to get Valuable InformationI am pleased to announce that I am teaming up with well-known local solicitors, D'Angibau LLP, to give a free seminar to people who are in or approaching retirement. The purpose will be to explain a number of issues, and there will be no selling of any financial or other products. Why is this necessary? Well, the rules keep changing, and the uncertainty can make it very difficult to plan ahead. This is an easy way to keep abreast of the changes and how they might affect you. The topics will include: - How to arrange your affairs at retirement
- Powers of Attorney (especially the new Lasting Powers of Attorney)
- Things to consider if you have property abroad
- Releasing Equity from your Home
- Paying for Long Term Care, if needed
- Inheritance Tax planning (including the latest changes).
We are going to run this seminar locally (Poole) in April 2009, the exact date and timing depending on the number of people who wish to attend, and what time of day suits them best. There will be plenty of time for questions and individual discussions afterwards, and there will be no follow-ups unless requested. We think this is a valuable opportunity to receive information and advice, with no pressure or commitment. If this would interest you, telephone me on 01202 551664, or email me: helenkanolik@heliting .com I look forward to hearing from you soon. December 2008You'd have to be mad to invest money at the moment - Or would you?The last few months have been full of doom and gloom, with very few words of financial comfort. Instead, we have seen global economies weakening, banks going bust, and companies having severe trading difficulties. So where do we go from here? You may believe that this is the end of capitalism, and the input of billions of Pounds, Euros, Dollars, Renminbi etc. from Governments all over the world will not have any effect. If so, you probably have all your money in bank accounts, with no more than £50,000 in any one account. That way, you won't lose any money, but you may be disappointed with the return in a few years' time. There tend to be two major emotions which guide investors around the world ? greed and fear. When times are good, greed is in the ascendance, and we tend to believe that things will always be good. When times are bad, fear takes over, and we think it will never get better. In fact, they are both equally irrational. Do you remember 1973? Property prices had plummeted, interest rates hit 13%, the Bank of England bailed out 30 banks. There were massive shortages of oil, the price of which had effectively quadrupled. There was a global recession and the stockmarket fell by 33% between May and August 1974, and over 60% over the year ending 25 November 1974. On 24 January 1975, the market went up by over 11%, and by 10 February 1975 the gain was almost 82% in four weeks. Over 1975, the market rose by almost 160%. So, what is going to happen this time? Have the fundamentals changed? It certainly seems that markets have become more volatile, and it is true that economies from the UK to the USA, to China and the rest of the world, depend on each other as never before. It is also clear that the Governments are prepared to take extreme action to kick-start the economies back into growth, so we can get back to business as usual. I think we will see deep aversion to poor quality lending, so that what has happened over the past year or two does not recur. Hopefully, common-sense will prevail once again. I remain an optimist (you might say that I have to be, to continue as an IFA). I believe that in five years' time we will look back on 2008 and say, "It was horrible, but it was a great time to invest". The best strategy may be to drip-feed money into the stockmarket, perhaps over several months. Then the risk of poor timing is reduced ? but also reduced is the risk of missing out completely if the market jumps up suddenly. If you are making monthly payments into a pension, ISA or endowment policy, you are doing this already. If you have a lump sum to invest, you can do a similar thing by ?phasing' the investment. Speak to your adviser, or to me if you don't have one, and make informed decisions about where to put your money, and I hope it does very well for you. SEASON'S GREETINGSBest wishes to everyone reading this - have a very merry Christmas, and a happy, healthy and prosperous new year. November 2008Equity Release - Fixed for Life?Equity release is becoming more and more popular, because many retired people do not have enough income to live on, but they do have money tied up in the value of their homes. Many elderly people do not want to move house, because of the memories where they are, and the stress of moving and changing things. One consequence of the new, low level of interest rates is that interest rates on new equity release mortgages (also known as Lifetime Mortgages) should be lower than they were. It might also be possible to benefit if you took out a Lifetime Mortgage some time ago, when interest rates were a lot higher. If you have a fixed rate of, say, 7%, you may be able to change the mortgage and save money over the long run, even after paying the costs of changing. Contact me if you would like me to look at this for you. I am fully authorised to give advice on Equity Release. Is Your Business ProtectedIn the current business climate, how would your business survive if a key employee or partner was unable to work for an extended period? Or if they were to die prematurely? Don't take the risk - it can cost much less than you might think to protect your business. ItÂ’s certainly worth looking into. October 2008Since my last update in September, we have seen even more market turmoil, and rescue plans for banks which seem to be having the desired effect. However, the condition that the banks stop paying dividends is naturally not pleasing shareholders, so the share prices have fallen back again. I wonder how the Government expected the shareholders to react. Legal and financial issues for the over 50's - Proposed SeminarI am pleased to announce that I have been in discussion with local solicitors, DÂ’Angibau LLP, regarding a joint seminar to explain a number of legal and financial issues – with no selling of any financial or other products. We are proposing to cover the following topics: - How to arrange your affairs at retirement
- Powers of Attorney (especially the new Lasting Power of Attorney)
- Considerations if you have property abroad
- Releasing equity from your home
- Paying for long term care, if needed
- Inheritance Tax planning.
We think that this is a valuable opportunity to receive information and advice on these important matters, at a convenient venue in this area, with no pressure or commitment required. The seminar should last about one and a half hours, and light refreshments will be provided. There will be no follow-ups unless requested. We are only going to run the seminar if enough people are interested, so please contact me if you would like to be on the list. September 2008I wish I could be really positive about the economic and financial situation at present! I know we are going through torrid times – the worst since 1929, some are saying – but I always try to be optimistic and think long-term. After all, since 1929, living standards in many parts of the world have surely risen beyond the wildest dreams of people who lived through it then. The thing that's most difficult to cope with is the knowledge that at the moment, our personal wealth is being attacked on several fronts. Our houses are decreasing in value, our investments are going down, and living costs are going up. Where do we put our money to keep it safe, and so that one day we can see it growing again, with confidence in the system? (By the way, I can't imagine me ever answering that question with 'under the bed'.) Well, the safest places at the moment are National Savings and Northern Rock, because both are backed by the Government. Because they are so safe, they give returns which many people consider to be too low. If you want a higher return, but don't have confidence in the system, you can save with banks, but spread your money around. The Financial Services Compensation Scheme covers the following: Deposits: £35,000 per person (for claims against firms declared in default from 1 October 2007). For bank and building society accounts ??100% of the first £35,000. Investments: £48,000 per person.??100% of the first £30,000 and 90% of the next £20,000.  Mortgage advice and arranging: £48,000 per person (for business conducted on or after 31 October 2004).100% of the first £30,000 and 90% of the next £20,000.  Long-term insurance (e.g. pensions and life assurance): unlimited.100% of the first £2,000 plus 90% of the remainder of the claim. This includes pension annuities.  If you are in pension drawdown ('income withdrawal'), you can consider moving to an annuity, which can guarantee your income for the rest of your life. If you have a long timeframe and you are a risk-taker, going into the stock-market now may prove to be a good move one day. Dividend yields are very high at the moment, because share prices are down. July 2008If you are approaching retirement – say, within the next two years - have you started to make detailed plans for this major change in your life? Do you have ideas about things you have always wanted to do, but didn't have time for? These days, there are lots of choices to make and various options about how to manage your money, so most people need expert guidance to get through the maze. It can start well in advance, with strategies to keep your money safe until you are ready to use it. The key questions to ask yourself as you approach retirement are: - How much will I need each month to live on?
- If I continue to work (perhaps part-time), how much will I need to draw from my pensions?
- How do I make sure all my de
bts are paid off so I don't have to worry about them when I stop working? - Will I have some savings and investments as well as regular income?
- How safe do I want my money to be?
- Do I want my financial arrangements set up so that I pay as little tax as possible?
I can help you to answer these questions and set up your finances in the most suitable way, so contact me if you are in this situation and you need to start getting your finances in order for retirement. June 2008Protecting Your InterestsI am not going to say anything about the markets this time - whatever I say will be wrong! Instead I will turn to another subject - Financial Protection. None of us likes to think about the possibility of an illness or accident, or of dying prematurely. But we do know that these things can happen, and that it is wise to insure against them. If your or your family's financial security depends upon one or two breadwinners, can you afford to take the risk of something happening to stop that income? Your house and car may be protected, but not your most valuable asset à your earnings. The protection market is intensely competitive, and the costs have been reducing over the past few years for most people. If you don't have any cover, you may well find that it is cheaper than you think. If you do have cover which you took out a while ago, you may be able to replace it more cheaply, or buy more for the same price. When times are hard and the economic situation is gloomy, it's good to feel that your family is protected, and that you have got a good deal. Contact me if you would like to review your protection now. PEP and ISA ChangesYou may well have heard about the forthcoming changes to ISAs. Here is a summary for you, including some practical tips. - The overall limit will increase to £7,200 a year.
- The distinction between mini and maxi ISAs will no longer exist.
- Of the £7,200 allowed each year, up to £3,600 can be in cash. It can be with the same company as the stocks and shares part, or another company/bank.
- If you wish, you can transfer cash ISA money into stocks and share ISAs, without affecting your annual allowances (but you cannot transfer the other way). This could be useful if you have built up lots of money in cash ISAs, and want to take advantage of the current lower share prices to invest for growth over the medium-long term.
- If you are currently saving each month into a stocks and shares ISA (mini or maxi), you could increase the monthly amount to a maximum of £600, without having to apply for a new plan. Your ISA provider will probably increase the amount if you send them a letter requesting them to. I can supply a letter template if you wish.
- If you want to put £3,600 in cash into your ISA, your monthly stocks and shares savings can be up to £300.
- All Personal Equity Plans (PEPs) will become stocks and shares ISAs. It is not yet clear whether you will be able to amalgamate them, to reduce paperwork and make it easer to manage your money.
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