Five ways to help cut mortgage costs

Five ways to help cut mortgage costs

by | Apr 26, 2023 | Uncategorized

FIVE WAYS TO HELP CUT MORTGAGE COSTS

03

MAY, 2023

Mortgages hit the headlines last summer when rates started climbing. Around 1.4 million households are set to renew their home loans this year[1]. Mercifully things have settled since late 2022 when five-year fixes were north of 6% – they are now available at around 4%[2].

Even at the new lower rates, most people will see an overnight increase in the amount they need to repay once they remortgage.

Here’s how to make sure you get the best deal possible and minimise the hike in monthly repayments.

 

1. DON’T RUSH TO FIX

Fixed rate mortgages are preferred by most, mainly for the peace of mind they know what they owe each other month and that it won’t change.

Even though interest rates are still rising, mortgage rates are now coming down. According to Moneyfacts, which tracks mortgage rates, both the average two-year and five-year fixed rates fell month-on-month for the third month running, down to 5.44% and 5.20% respectively[3]. 

The best five-year fixed rate mortgages fell below 4% earlier this year. 

If you have plenty of time before your mortgage runs out, you might want to wait a little longer as fixed interest rates are expected to fall further in coming months. This is not guaranteed of course. 

 

2. CONSIDER BIDING TIME WITH A TRACKER

If your mortgage is up soon but you want a bit more flexibility on choice, a tracker mortgage could be a worthy consideration. 

But variable deals also typically have no early repayment charge (exit penalty), so if fixed rates fall to a level you’re happy with, you could swap and fix your payments without a fee to pay. However, you need to be comfortable that the rate of a tracker mortgage could rise (as well as fall) in the months to come if interest rates rise further. 

 

3. DON’T MISS THE EXPIRY DATE OF YOUR MORTGAGE

Once a fixed rate mortgage expires, you are automatically placed on your lender’s Standard Variable Rate (SVR). The average SVR is currently an eyewaterinw 6.84% – the highest on Moneyfacts records since October 2008 when it was 7.01%.[4] 

Make sure you know the date your mortgage deal expires and work in good time to secure a new deal to avoid a payment shock. 

4. TALK TO YOUR LENDER

Your existing lender will be able to talk through options with may turn out to be competitive. But maybe not, so don’t agree to anything on the spot. You might be much better off exploring options with other lenders.

 

5. GET PROFESSIONAL HELP

It’s worth talking to an independent mortgage adviser as they often have access to better mortgage rates than those available to anyone on the internet or from a high street bank. 

A professional will also be able to help those remortgaging while on maternity or paternity leave on a reduced income, are self-employed or have an irregular income.

Older borrowers might also face difficulty if their lender won’t lend to those beyond a certain age. 

By approaching lenders they know to be flexible or helpful for such circumstances, your adviser can find the best value mortgage. 

Your home may be repossessed if you do not keep up repayments on your mortgage.

 

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PROVIDING NEWS AND VIEWS TO SUIT ALL NEEDS

This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

Tavistock Partners Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Partners (UK) Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Private Client Limited is authorised and regulated by the Financial Conduct Authority. The Tavistock Partnership Limited is authorised and regulated by the Financial Conduct Authority. Abacus Associates Financial Services is a trading style of Tavistock Partners (UK) Limited which is authorised and regulated by the Financial Conduct Authority. Duchy Independent Financial Advisers is a trading style of Tavistock Partners Limited which is authorised and regulated by the Financial Conduct Authority, All subsidiaries are wholly owned by Tavistock Investments Plc.

Rising Cost of Living

Rising Cost of Living

by | Feb 9, 2023 | General Investing, Managing Risk, Planning

RISING COST OF LIVING:

TIPS TO MAINTAIN FINANCIAL WELLBEING

13

APRIL, 2023

Wellbeing has never been so important, particularly with such a turbulent year – and it’s extremely likely there is far more to come throughout 2023. 

RISING COST OF LIVING: TIPS TO MAINTAIN FINANCIAL WELLBEING

Money matters play a big part in our feelings of wellbeing. Yet there are financial worries for households in all corners at the moment. Inflation means the cost of everything is soaring from groceries to energy bills, clothing to restaurant meals out, and holidays to home improvement works.

The rise in the cost of living is perhaps the main source of angst for many households. The latest data[1] shows that the Consumer Prices Index (CPI) rose by 10.4% in the 12 months to February 2023, slightly up from 10.1% in January 2022.

Meanwhile global stock markets are suffering which means that the value of our investments and pensions is currently less healthy.

While savers will be seeing a better return on their money thanks to rising interest rates, those returns are still not keeping up with inflation.

The current economic environment could be triggering stress among many people. Getting in control of your money matters can be a huge step forward in gaining some clarity and peace of mind. In some circumstances, you can take steps to regain control and get yourself in a better financial position.

Here are five tips on how you can improve your financial wellbeing.

1. ENGAGING WITH FINANCES

Make managing money part of your routine – build it into your daily or weekly tasks whether that be monitoring your everyday spend, weekly outgoings or organising monthly investment commitments.

2. IT PAYS TO TALK

Financial wellbeing is achievable when you feel confident and have a clear understanding of what your financial priorities are. Once you have awareness of your financial position you should be able to identify any areas where you feel like change is needed and who you may need to seek support and guidance from. The Talk Money campaign, run by the government’s Money and Pensions Service, is one of many important ways in which financial wellness is being championed. It encourages being more open about money with friends and family and getting advice from experts if needed.

3. PLAN FOR THE FUTURE 

The main benefit of financial planning is peace of mind through a detailed understanding of your finances now and getting a future plan in place. When you have a clear financial plan, it gives you a clear path to work towards and you may feel a stronger sense of financial stability.

4. SEEK GUIDANCE FROM A PROFESSIONAL

Financial advice can go a long way to provide peace of mind that you are addressing the needs of you and your family. It can also help to have a professional on hand to talk through something that’s troubling you. If you have investments that have fallen in value, it might cause you stress. Remember that investing is a long-term commitment, and a financial adviser can offer support in ensuring that your portfolio still represents a solid way to reach your stated goals.

5. KNOW WHEN TO GET HELP

There are circumstances where it will be necessary to enlist the help of a debt specialist. If you get to the stage where the cost of living crisis means that are unable to repay debts and are perhaps borrowing to make repayments, it’s time to speak to an expert. Getting help from a debt charity is free and they can go through your finances and advise you on the best path to becoming debt free. They can also deal with the bank on your behalf in some cases, sometimes getting them to freeze interest charges. Try Stepchange.org or Nationaldebtline.org. Many of those who get debt help have said what a huge relief it is to finally address the problem

 

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PROVIDING NEWS AND VIEWS TO SUIT ALL NEEDS

This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

Tavistock Partners Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Partners (UK) Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Private Client Limited is authorised and regulated by the Financial Conduct Authority. The Tavistock Partnership Limited is authorised and regulated by the Financial Conduct Authority. Abacus Associates Financial Services is a trading style of Tavistock Partners (UK) Limited which is authorised and regulated by the Financial Conduct Authority. Duchy Independent Financial Advisers is a trading style of Tavistock Partners Limited which is authorised and regulated by the Financial Conduct Authority, All subsidiaries are wholly owned by Tavistock Investments Plc.

Equity release lifeline during cost of living crisis

Equity release lifeline during cost of living crisis

by | Sep 1, 2022 | Uncategorized

EQUITY RELEASE LIFELINE DURING COST OF LIVING CRISIS

7

SEPTEMBER, 2022

EQUITY RELEASE

With inflation now in double figures – hitting 10.1% in the 12 months to July1 – household budgets are being hit hard.

Cost cutting will be high on the agenda for many families struggling with the cost of living crisis.

The fact the energy price cap is to rise once again in October, as well as January 2023, means there’s no end in sight to soaring gas and electricity prices.

Since there’s only so much that can be done to strip back spending and reduce household bills, people are looking at ways of raising extra cash to help make ends meet.

Many over-55s are using the equity in their homes to release cash. The number of equity release plans agreed between April and June this year is up 26% on Q2 20212, which equates to 200 plans being agreed every day.

Another report3 highlighted that equity release funds currently account for one in every £90 spent by retired people within the UK.

As house prices rise, and interest rates on mortgages continue to rise, more and more older family members are also gifting funds from their housing equity to help younger generations members cope with higher bills.

 

Lump sum lifetime mortgages are becoming more popular. This recent trend is likely to be influenced by the fact that gifting money to younger family members and sharing property wealth across generations.

Raising cash via equity release has been a popular method in the past to help loved ones get on the property ladder too. A boost to a deposit could help cut the interest rate charged on their mortgage, making significant savings in the long term.

Other popular uses include home improvements, clearing debts – either an existing mortgage to eliminate the burden of making monthly repayments – or to consolidate unsecured debt.

 

“With inflation now in double figures – hitting 10.1% in the 12 months to July  – household budgets are being hit hard.“

Some like to use it simply to establish a savings buffer.

Equity release plans have changed over the years, becoming far more flexible. For example, more than two thirds (68%) of equity release loans allow customers to make voluntary capital repayments with no early repayment charge4.

This reduces the final interest payment due when the property is sold, leaving more money for long-term care or to leave as inheritance.

The Equity Release Council has highlighted that by making penalty-free partial loan repayments in 2021, customers reduced their future interest costs by tens of millions of pounds[5].

It’s expected that the amount of money taken through equity release loans will grow as time goes on and people rely more heavily on equity release as a source of funds.

The Centre for Economics & Business Research (Cebr), forecast that the average amount of equity released is set to rise above £170,000 within the next five years, even taking into account an expected slowdown in house price growth[6].

INTERESTED IN EXPLORING EQUITY RELEASE?

It’s worth exploring equity release with a Tavistock specialist equity release adviser who can give specialist advice, which is vital to help people to make the right choices for their individual circumstances now and in the future. It’s also smart to discuss an existing equity release loan with an adviser to see if there’s a better deal available that could save you money on interest payments. You may even want to switch to a more flexible loan than you already have.

PROVIDING NEWS AND VIEWS TO SUIT ALL NEEDS

This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

Tavistock Partners Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Partners (UK) Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Private Client Limited is authorised and regulated by the Financial Conduct Authority. The Tavistock Partnership Limited is authorised and regulated by the Financial Conduct Authority. Abacus Associates Financial Services is a trading style of Tavistock Partners (UK) Limited which is authorised and regulated by the Financial Conduct Authority. Duchy Independent Financial Advisers is a trading style of Tavistock Partners Limited which is authorised and regulated by the Financial Conduct Authority, All subsidiaries are wholly owned by Tavistock Investments Plc.

How your pension can benefit loved ones

How your pension can benefit loved ones

by | Aug 4, 2022 | Uncategorized

How your pension can benefit loved ones

 

07

SEPTEMBER, 2022

Pensions

Your family could benefit from your pension savings after you are gone – it all depends on the type of pension you have.

For personal pensions, the rule changed in 2015 that gave everyone access to savings at age 55 which also included new measures for passing on your pension after you die.

Workplace pension schemes offer some benefits to families too, with some offering pension death benefits.

Passing on your pension

If you die before you turn 75 and haven’t touched your pension, the money can be passed to your beneficiaries tax-free.

In this case, the money can be taken as a lump sum, invested in drawdown or even used to purchase an annuity.

If you die before your 75th birthday, and have already started drawing your pension, the rules are different. The way you have chosen to access your savings will determine the action your beneficiaries can take. For example, if you’ve withdrawn a lump sum and you have remaining cash in your bank account outside your pension, this will be counted as part of your estate. But if you’ve opted for drawdown your beneficiaries can access whatever’s left in your pension entirely tax-free.

If you die age 75 or older, your untouched pension pot can be paid to your beneficiaries either as a lump sum or through beneficiary drawdown, or an annuity. All payments will be subject to income tax at their marginal rate, but not inheritance tax.

Expression of wishes

To ensure your pension gets passed on after you die it’s important to let your pension provider – private or workplace – know your nominated beneficiary – as well as their contact details. A nomination or expression of wish form clearly lays out who you would like your beneficiary (or beneficiaries) to be and should be updated to reflect any changes in circumstances – such as marriage or divorce.

The rules of your scheme

All schemes differ so it’s important to understand what beneficiaries are permitted to do with the money that’s rightfully theirs. Some schemes don’t offer the fund to be converted to income drawdown – and typically you can’t transfer a death benefit so moving to a provider that does offer drawdown won’t be an option.

You might also check whether beneficiaries are entitled to the whole value of accrued funds, or only part of them.

It’s worth checking on the way in which benefits are paid, as it could impact how they are taxed.

If they are left to your estate, they could be subject to inheritance tax. But if they are left under the discretion of the scheme trustees, inheritance tax can be avoided.

Final salary pensions

If you die while an active member of your defined benefit pension scheme, your beneficiaries might get a lump sum. This is often a multiple of your salary.

If your pension is being paid, there’s often a guarantee period (usually 5-10 years).

If you die within the guarantee period, a lump sum might be paid to your beneficiaries.

GET ADVICE

Pensions can be complex so it can help to have an adviser on hand to do the investigatory work on your behalf. They can help with any restrictions on schemes and keep you up to date with any rule changes that are common with pensions.

 

 

PROVIDING NEWS AND VIEWS TO SUIT ALL NEEDS

This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

Tavistock Partners Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Partners (UK) Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Private Client Limited is authorised and regulated by the Financial Conduct Authority. The Tavistock Partnership Limited is authorised and regulated by the Financial Conduct Authority. Abacus Associates Financial Services is a trading style of Tavistock Partners (UK) Limited which is authorised and regulated by the Financial Conduct Authority. Duchy Independent Financial Advisers is a trading style of Tavistock Partners Limited which is authorised and regulated by the Financial Conduct Authority, All subsidiaries are wholly owned by Tavistock Investments Plc.

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