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Boost Your Savings

Boost Your Retirement Savings

Saving for retirement is one of the most important financial goals you can achieve. It’s easy to think that planning for the future is something you can put off until you’re much older but the sooner you start, the more money you are likely to finish up with when you retire. So it’s well worth saving as soon as you get a regular income. Even a small amount of retirement savings can provide you with enough income to live on if you need it.

Here are some tips on how to boost your retirement savings to maximise long term returns:

1. Take full advantage of workplace pensions and auto-enrolment

Using your company’s pension scheme and auto-enrollment is an easy way to increase your savings. An occupational pension is an employer-organised pension, and all employees between the ages of 22 and the state pension age are entitled to a pension if their annual income exceeds £10,000.

Most employers have already introduced a pension plan for their employees and, even if the employee does not contribute, the employer pays a minimum contribution. They can also provide a generous matching element to encourage employees to save more for their retirement.

If you are self-employed and not eligible for a workplace pension, you can set up a personal pension to save for your retirement. You can add regular contributions or make ad hoc payments into your self-employed pension, and your pension provider will invest on your behalf.

This permits the provider to offer a larger range of investment options, and therefore gives you more options than the usual workplace pension. While you won’t get the benefit of employer contributions, you will still benefit from tax relief.

2. Benefit from higher rate tax relief

Tax relief is applied to payments made into a pension. The amount of tax relief you get depends on what tax bracket you are in:

  • Basic-rate taxpayers get tax relief of 20%. For every £80 you pay in, the government will top this up by £20. This brings the total pension contribution to £100.
  • Higher rate taxpayers get tax relief of 40%. For every £60 put in, the government tops this up by £40.
  • Additional rate taxpayers get 45% relief. For every £55 put in, the government will give top this up by £45.

3. Use pay rises as an excuse to save

Increasing the amount you pay into your pension is the easiest way to boost your fund value. A good time to do this is if you get a pay rise. You are not used to having that money at your disposal, so instead of giving yourself the opportunity to spend it, redirect a portion of it into your pension.

4. Understand what your pension is invested in

Take time to explore and understand the investment options open to you. Most pension schemes allow you to check online where your money is invested and how your investments are performing.

If you are paying into a pension through your employer, you are likely to be paying into the standard default fund. This offers the advantages that your money is invested straight away in assets such as shares, and that a manager will look after your investments. However, default funds are designed for the needs of the average scheme member, and you don’t choose the assets, sectors or countries where your money is invested.

Depending on factors such as your investment principles, age and attitude to risk, you may find that the default option is not suitable for you. You may prefer the potential for high returns, or you may not agree with the ethics of the company or industry where some of your investment money is allocated.

There will be other funds to choose from in a workplace scheme and these are worth considering.

For people saving into a personal pension, check that your investments are diversified and that you are not overpaying in fees.

5. Avoid pension scams

Beware of pension scams. Fraudsters are posing as investment professionals and trying to persuade people to transfer their money into unauthorised schemes. These are likely to be high-risk investments, which may even be fake accounts so you could lose your money.

It’s always worth checking the FCA register of regulated companies (fca.org.uk/register), and the FCA warning list of known scam firms (fca.org.uk/scamsmart/warning-list).

If you have any questions about retirement planning, get in touch today.

Written by: Kariemah Boltman

30 June 2022

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Going Green – A look at Property Energy Efficiency

Going Green - A look at Property Energy Efficiency

The Squeeze of the cost of energy prices is felt throughout every home. The soaring rise in energy bills will leave many feeling the pinch. Coupled with the rise in inflation and the current cost of living crisis, there is nowhere to escape. 

Every pound counts and saving where you can is necessary with energy prices predicted to rise further this year. Households are being encouraged to save money by improving energy efficiency. Improving the energy efficiency of your home is the best long term solution to reducing energy bills.  

The mortgage market is doing its part to encourage this and this is how.

Green Mortgages - Go Green and Save!!!

The government set into motion their plans to reduce the carbon emissions by 75-80% of current levels by 2035. Housing is responsible for roughly 14% of the UK’s total emissions.

Regulations to building more energy efficient homes to reduce housing emissions have been put in place by the UK government. Existing homes can play a part too. According to the Climate Change committee, 19 million properties have an Energy Performance Certificate (EPC) less than “C”. 

Mortgage providers have launched “Green Mortgage Products” which incentivise properties with A & B, by introducing lower interest rates than those available for standard EPC rated properties. This is to persuade homeowners to make their homes more energy efficient. 

Energy Performance Certificates are an assessment of how well your property uses and retains energy. The improvements to your homes energy efficiency can save you in energy bills and in mortgage interest payments.

On rates currently available, an EPC rating of A or B would get you a residential green mortgage product rate over five years of 2.56% at 60% loan to value (LTV) versus the standard mortgage product rates which would be 2.67%  for the equivalent LTV. This means someone on a green mortgage interest product will pay 3.09% less interest on their mortgage over that same five year period. This is a saving of thousands over the medium to long term.

As long as your property Energy Performance Certificate is A or B you qualify for a green mortgage.  

Green Mortgages for Buy To Lets (BTL)

Investment BTL properties can also qualify for green mortgage products. The additional benefits of energy efficiency in these properties can extend beyond the lower mortgage interest rates you would qualify for. Energy efficiency properties raise the value of the property and can mean more rent can be charged by the landlord. The tenants would in turn also save on energy bills. 

Many investors have seen to use this as a strategy to increase their property portfolio value by improving low energy efficient BTLs in order to increase the value of the property and be able to charge higher rents and in turn increase their rental yields.

Government help

The government estimates the cost of improving your property to an energy rating of “C” to be around £4,700.  Residential homeowners and landlords on tighter budgets may not have the cash to make the improvements needed to obtain a high enough EPC rating to allow them to switch to a green loan. 

The Department for Business Energy and Industrial Strategy (BEIS) and the Chancellor Rishi Sunak confirmed that the fourth and final phase of the Government’s Energy Company Obligation (ECO) scheme will go ahead. The new ECO grant scheme will run over 4 years, and end in March 2026. Like before, ECO grants will be available to improve the energy efficiency of the UK homes that need it most. The grants are funded by energy suppliers.

In this scheme, ECO grants will focus on a property’s EPC to ensure the home can gain maximum benefit from any energy efficiency measure installed. The aim of the ECO is to help UK homes achieve an EPC rating of at least a C.

Energy Efficiency Improvements to your home

Making your home more energy efficient is not just about installing the most expensive solar panels. The aim is to create all-round home energy efficiency, from roof and windows to walls to heating. Small improvements to the home can count to the overall energy efficiency of your home.

  • Double glazing windows
  • Installing cavity wall 
  • Loft insulation
  • Draught-proofing windows and doors 
  • Installing pipes and tanks 
  • Installing condensing boiler
  • Reducing water usage
  • Energy efficient glazing
  • Installing low-energy usage light bulbs 
  • Energy-efficient heating and air conditioning systems
  • Water heaters (natural gas, propane or oil

The government encourages you to use TrustMark registered company for improvements. Making upgrades to take advantage of requirements to make the properties more energy efficient which will raise the value of your property.

Contact us for advice on your mortgage needs. We deal with a variety of advice services in the mortgage market. We can help you too!

Written by: Nwabisa Janda

16 June 2022

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CBAM – Portfolio Performance & Review – 12 JULY

On the 12th of April, we are hosting a webinar with our Discretionary Fund Manager, Cape Berkshire Asset Management (CBAM).

The heads of the investment team, Mark and Shingirai, will be your hosts for the webinar and they will offer insight that we don’t normally share with clients or the public, so book your seat and bring along any questions you may have.

 
 

Join Mark and Shingirai on the 12th of July for 45 minutes to 1 hour. 

What will be covered?

  • 2022 Q1 Macrothemes
  • Portfolio Performance
  • Portfolio Positioning
  • Remainder of 2022 Outlook and Strategy

Those who register to the event will be sent a link to the webinar a day prior to the event.

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