Weekly News Bulletin - 20/09/2021
Tax Free Savings
State pensions backlog will be resolved by end of October
The Department for Work and Pensions (DWP) will clear the state pension payment backlog by the end of October 2021, according to Pensions Minister, Guy Opperman. He commented that the department was working hard to clear backlogs that were a result of the COVID-19 pandemic and added that staffing issues had now been rectified, stating that “hundreds of additional staff” were currently being redeployed to work on the issue. David Sinclair, director at the International Longevity Centre UK, said the delays could have a big impact on poorer claimants. He said the episode shed a light on wider issues and called on the DWP to ensure that the pension system was more automated. Those reaching state pension age are required to make a claim before payments start. BBC News
New campaign to help savers locate ‘lost’ workplace pensions
Punter Southall Aspire is spearheading a new campaign to help savers track down lost pension pots. This industry-wide campaign, backed by Scottish Widows, Legal and General, Aegon and Standard Life, aims to highlight the amount of money in unclaimed pension funds and encourage people to track down older workplace pensions. According to Punter Southall Aspire there are now 1.6m dormant pension pots worth some £19.4bn. This equates to an average £13,000 in each ‘lost’ pension. Corporate Adviser
'Difficult' transfer processes putting savers off changing pension provider
More than two-fifths (42%) of savers who have tried to change pension providers found it so difficult that they would not attempt another transfer, according to PensionBee. Research from the provider also found that more than half (51%) of those who attempted transfers cited encountering some kind of difficulty with support from their provider, with 22% specifically reporting long waiting times." Pensions Age
Britons losing around £23,000 in 'lost' pension pots - how to find your retirement cash
According to new research from Profile Pensions, Britons are losing around £23,000 of their retirement savings due to unclaimed pensions. The research found that as many as 1.6m lost pension pots worth £19.4bn could remain unclaimed, with moving house being the main reason people lose touch with their pensions. Daily Express
Savings boost: better options than simply putting money aside
Alistair McQueen says there are many saving options beyond cash, and millions of people take advantage of them. Investing directly in equities, or indirectly via an Isa or pension, gives people easy access to wider investment markets, with potentially better rates of return, he explains. He gives three tops tips for those considering saving in ways beyond cash: to commit to saving for a period of five years or more, as this will allow you to ride the ups and downs of the underlying investment markets; to spread your money across different investments, to avoid the collapse in one investment bringing down all your savings; and to take advantage of the tax-breaks available via Isas and pensions, such as no tax payable on any capital gains when you come to sell. News Chain
Property
Home values could surge by 30% in next 10 years
UK house prices are predicted to increase 30% by 2031, according to research from comparethemarket.com. The site analysed ONS data from 1992 to 2020 combined with a forecasting model to come up with the figures. It also found that prices in central London could grow by 33% in the next ten years. This would make the average house price in the capital £619,568 in 2031, compared to £465,549 today. The average house price in the UK currently sits at £248,496 but this could increase to £323,718 in 2031. The research found that house prices are likely to continue increasing until 2040. The site also looked at the average age of first-time buyers across the UK, dating back to 2006. The average age of a first-time buyer is currently 35 in London but by 2031, this is likely to increase to 37. The rest of the UK could see the average age increase by 1.6 to almost 35. Daily Express (06/09/2021)
End of stamp duty relief slows house price rises
The housing market cooled in August, according to the Royal Institution of Chartered Surveyors, as buyers and sellers braced for the end of the stamp duty relief. In its latest assessment of the property market, Rics said that new listings and sales had dipped again in August, as did new buyer enquiries. House prices are still rising, but the pace of growth has slowed. The findings suggest that the property market is readjusting after a record year in which it defied the broader downturn in the economy. "The latest survey evidence inevitably points to market activity taking a breather after the flurry of sales seen before the tapered stamp duty holiday withdrawal,” said Tarrant Parsons, economist at the institution. “That said, while momentum has eased relative to an exceptionally strong stretch earlier in the year, there are still many factors likely to drive a solid market going forward." The Times
Inheritance Tax
Benefits of transferring inheritance
Steve Webb has undertaken a study for the I and found families could avoid pouring tens of thousands of pounds into landlords’ pockets by transferring inheritance sooner. Based on national averages, Webb found that if 75-year-old grandparents were to give £40,000 to their 25-year-old grandchild towards a deposit on their first home, they would avoid spending £75,600 in rent over the next nine years. The study is based on the grandchild renting a two-bedroom property, with the national average rent for this in England in 2020/21 at £700pcm. The Independent
Starmer could back wealth tax
Labour leader Sir Keir Starmer is under pressure to back a wealth tax to pay for social care, reports the Mirror, with Greater Manchester mayor Andy Burnham calling for "a range of wealth taxes - such as a higher rate of capital gains tax". Mr Burnham, who has mooted a 10% tax on inheritance, has urged Labour to set out a plan on taxation, saying: “Criticism of the Tory plan alone won’t cut through unless we say what we would do.” Mr Starmer, who this week said Prime Minister Boris Johnson plans to “impose unfair taxes on working people" while his own plans will look to “ensure those with the broadest shoulders pay their fair share”, has been urged to detail exactly what his policy will comprise. Daily Mirror