Weekly News Bulletin - 11/10/2021
ISA's
Which platforms can beat a 4pc rate of inflation?
With inflation rising, savers are increasingly looking for ways to earn a return on their money. The average easy access account rate hit a record low of 0.09% in August, but there are plenty of peer-to-peer lending platforms targeting rates of 4% and more. By investing via an Innovative Finance ISA (IFISA), investors can also earn tax-free returns on up to £20,000 of investments every year. P2P Finance News
Tax Free Savings
How to boost your pension savings at any stage of your career
Whether you are on the brink of retirement or have years to go, there are things you can do now to generate a larger post-work income. Increasing the sum you pay into your pension each month can be especially lucrative if your employer is willing to match some of your extra contributions. If you have had several jobs with different pensions, it may be worth combining your funds – but only those that are defined contribution schemes. Maximise your state pension. Filling a recent gap in your national insurance record costs a one-off lump sum of £800, but will usually add more than £250 to your state pension every year. Switch to more risky funds. The more risk you are prepared to take, the higher return you can expect to get over the long run. Pay in a lump sum. Move funds from low interest savings accounts, it will get tax relief as soon as you do. If you are a basic-rate taxpayer, putting in a lump sum of £4,000 will result in £5,000 being added to your pot. The Guardian
Capital Gains Tax
Call to extend CGT deadline to limit fines
The Association of Accounting Technicians (AAT) has urged Chancellor Rishi Sunak to extend the capital gains tax reporting deadline for house sales amid concerns more people are facing hefty fines from HMRC. In its Budget submission, the accounting body criticised the “unreasonable” nature of a period as short as 30 days to pay CGT following a residential property sale, highlighting a “lack of awareness” of the timeline amongst those affected. Phil Hall, Head of Public Affairs & Public Policy at AAT, said: "The fine for not paying CGT within 30 days of a residential property sale is £100, but after six months jumps to 5% of the gain. This could potentially be an astronomical sum of money". FT Adviser & Public Policy at AAT, said: "The fine for not paying CGT within 30 days of a residential property sale is £100, but after six months jumps to 5% of the gain. This could potentially be an astronomical sum of money". FT Adviser
Property
House prices up £44 a day
House prices increased by £44 per day on average in the six months leading up to August, according to an index from Zoopla, with this up on the £30 a day increase recorded between July 2020 to January 2021. The average house price in August was £235,000, with this a record high for Zoopla’s index. The average property has seen its value climb £17,508 since March 2020, the month that the UK saw its initial coronavirus lockdown. Grainne Gilmore, head of research at Zoopla, said that while demand coming from buyers “has further to run”, this will be balanced by the ending of Government support for the economy via furlough and “more challenging economic conditions overall”. The Independent Evening Standard The Telegraph
Mortgage deals below 1% jump
Analysis by MoneySuperMarket shows that the number of mortgage deals with rates below 1% has surged in the last three months. While just 10 deals with rates below 1% were available in June, September saw 50 such deals. Analysis in April found that there were no home loans on the market with rates under 1%. Jo Thornhill of MoneySuperMarket comments: “Just six months ago, securing a mortgage rate of 1.5% to 2% would have been viewed as a real success but the past four months have seen borrowing get even cheaper.” She noted that it is not just re-mortgagers with low loan to value ratios that can benefit, with low-rate deals also available for first-time buyers and home movers. City A.M.
London the UK's property investment hotspot
London remains the UK’s primary focus for property investors, according to research from FJP Investment. It was found that 40% of those planning on purchasing a property in the next 12 months are considering investing in the capital. The West Midlands was the next most likely destination for buyers, with 32% citing it, while East of England ranked third, drawing the interest of 26% of potential investors. The study also reveals that 44% of UK property investors are now more inclined to consider investing in properties in rural areas than they were pre-pandemic. Of the 512 investors polled, 44% intend to expand their property portfolio in the coming year. City A.M.
Inheritance Tax
A future house price dip could see IHT reclaimed
Connor Coombe-Whitlock in the Express looks at how a dip in house prices could see more inheritance tax reclaimed from HMRC. The levy is based on the value of property at death and if the property is sold by the executors within four years of death at a lower value, overpaid IHT can be reclaimed. Data shows 3,630 people reclaimed IHT this way in 2020/21 – a fall of 26% on the year before – but more claims may be on the horizon if property prices slip, with values in the UK falling 3.7% between June and July this year. Sean McCann, a chartered financial planner at NFU Mutual, says that while the number of reclaims dipped last year due to the “buoyant” housing market, they are likely to increase if house prices continue to fall. Daily Express
Peer 2 Peer Investing
The 2021 Peer2Peer Finance News P2P Power 50
The 2021 Peer2Peer Finance News Power 50 recognises the most influential individuals in the peer-to-peer lending sector who have propelled its growth over an undoubtedly challenging year. The list shines a spotlight on the individuals that head the fastest growing and largest platforms as well as those that are rife with innovation. Two faces from the Financial Conduct Authority (FCA) made it into the Top 10 for the first time: chief executive Nikhil Rathi and Andrew Kay, head of department, retail lending. This reflects the pivotal role that regulation plays in the sector, at a time when the FCA is increasing its scrutiny of ‘high-risk’ investments. Meanwhile, there were several new names in this year’s Power 50 list, reflecting the continued growth of the industry. These included platform bosses such as EasyMoney’s Andrew de Candole, Leap Lending’s Fawzi Kyriakos-Saad, Lendwise’s Rishi Zaveri and Shojin Property Partners’ Jatin Ondhia. P2P Finance News