Weekly News Bulletin - 24/01/2022
ISA's
Thousands of savers become ISA millionaires with pots averaging £1.4million
There are currently 2,000 millionaires thanks to ISA savings accounts, according to recently published HM Revenue and Customs (HMRC) figures. Data from HMRC has revealed that of this group the top 60 savers have pots averaging an impressive £6.2million. When it comes to total ISA holdings in the UK, savers have amassed a staggering £2.8billion. This means that annual tax free returns to these investors would be more than £200million annually, if seven percent yearly growth was taken into account. According to InvestingReviews, one of the 60 ISA savers with a pot worth £6million would expect to get around £434,000 tax-free every year. Despite sharing this information, HMRC did not reveal the size of the UK’s largest ISA savings pot. However, the tax body’s figures suggest there could be a small group of “ISA beasts” who are sitting on pots in excess of £10million. Daily Express
SAVINGS
UK banks in payment ban for homeowners on Universal Credit and State Pension
Many Brits are unaware that getting benefits or a pension can mean up to half of lenders won't give them a mortgage. The issue is that for borrowers to get a mortgage, lenders look at all their sources of income to see if they can afford the loan. That includes salary, but also things like benefits and pension payments. Many only take some sorts of income into account and not others, which can come as a huge shock. For example, if you get a company or private pension, all of the 71 mortgage lenders doing standard homeloans class this as income. if you get Pension Credit, 30 out of the 71 lenders don't count this as income. 11 lenders don't allow SIPPs, or self-invested personal pensions, while 22 turn up their noses at drawdown. 12 out of 71 lenders don't take money from annuities. If you get Universal Credit, only 45 percent of lenders accept this, for Child Benefit claimants, 43 lenders oblige, For Carers Allowance, it's 31 out of 71 lenders, and for Child Tax Credits, 44 out of 71 lenders. Daily Mirror
'I was £27,000 in debt but now I save £1,200 in a month and own four homes'
Julie Haneline had £27,000 worth of debt after university - but now she is in the clear and shares her tips on how to save £1,200 in just one month by not spending a penny on pointless purchases. "I was in and out of debt until 2014 when I paid off all student loans and credit cards, then between 2007-2013 I made major sacrifices to save money and pay off debt. "I lived with family members, which included my parents again, roommates, and even lived in my friend’s sunroom. "Having a roommate wasn’t ideal in my late 20s but I did what I had to do so I could pay off debt and save for my first home." After becoming debt-free, decided to challenge herself with a “no-spend month” which involves not buying anything you don't need - such as clothes, takeaways or other frivolous spends - but you do still need to pay your bills. She said: "So no eating out, no shopping, no alcohol, pause subscriptions and memberships that aren’t a necessity, such as gym memberships, beauty subscription boxes, apps etc. "And try to hold out on hair and nail maintenance, and only buy items at the grocery store that are for a recipe or healthy snacks. Daily Mirror
PENSIONS
UK state pension systems not fit for purpose – MPs’ report
Department for Work and Pensions criticised for 'shambles’ that saw pensioners short-changed by more than £1bn. The public accounts committee (PAC) also lambasted the Department for Work and Pensions for its “complacency”, and accused it of not having been “sufficiently transparent” to parliament about the problems. In September last year it emerged that the DWP was estimating it had underpaid 134,000 pensioners, mostly women, a total of more than £1bn of state pension cash that they were entitled to. It emerged that those affected that the DWP could trace would be paid an average of £8,900 each. In February 2021 the Guardian featured the case of Angela Jenner, now 79, who was getting only 86p a week as her state pension but, after making a claim, saw this increased to £80.45 a week, and also learned she was owed £42,700. The Guardian
Martin Lewis shares how to get ‘thousands of pounds extra’ state pension - check now
Speaking on Thursday evening’s episode of ‘The Martin Lewis Money Show Live’, Mr Lewis offered some key tips on how Britons can boost their state pension entitlement by claiming NI credits. He said: “If you're a carer for someone who’s on a benefit, for over 20 hours a week, you can be entitled to Carer’s Credit, and if it's over 35 hours a week you might be entitled to £67 a week Carer’s Allowance.” Another potential benefit which could allow people to pick up NI credits is Specified Adult Childcare credits, which is available to those who have provided unpaid care for a child relative. Mr Lewis explained: “If you care for a child under 12 while their parent works, that includes distance care during the pandemic, then that form there (Form CA9176) can transfer their adult child care credit, and they’re getting a credit anyway because they're at work, to the carer. “I actually call this one ‘grandparents credit’. If you’re a grandparent looking after your kids’ kids because they're working, you might be entitled to National Insurance credits.” Daily Express
CAPITAL GAINS TAX
Capital gains tax: What investments should you be declaring?
As the self-assessment tax return deadline inches closer, many still don't fully understand what assets, profits and investments they need to declare. Self-Assessment tax returns need to include capital gains tax (CGT) declarations if the asset was sold for more than four times the allowance. But what counts as an asset in the case of CGT? Investors need to declare and pay CGT on certain shares and investments such as: Shares not in an ISA or PEP, Units in a unit trust, Certain bonds. Additionally, investors need to pay CGT on any cryptocurrencies they have “disposed of” in the last financial year that has turned a profit. HMRC refers to cryptocurrency coins as “tokens” and notes that disposing of these tokens could be through a variety of methods: Selling tokens for money, Exchanging one token for a different type of token, Using tokens to pay for goods or services, However, the tax free allowance can be utilised here so cryptocurrency disposals of less than £12,300 is exempt from CGT. Daily Express
PROPERTY
House prices will keep rising this year as potential buyers still far outweigh properties put up for sale, Rics estate agents warn
Shortage of homes coming up for sale hitting sales and pushing up prices. 'Mismatch' between supply and demand looks set to push prices higher in 2022. It comes as mortgage lenders consider stricter affordability checks. There is also a shortage of homes available in the rental market. Enquiries from buyers looking to move increased in December, but the average number of homes on estate agents' books remains low, according to the Royal Institute of Chartered Surveyors' latest survey. Thisismoney.co.uk
£12m in remortgages and drawdowns every single day: Homeowners release record £4.4bn in property wealth
Older homeowners released a record £4.4 billion in property wealth last year at a rate of more than £12 million a day as customers helped family and secured their own finances by repaying debt or remortgaging existing borrowing, according to new data. Around one in five equity release plans (19 per cent) taken out in 2021 was used to support family while two in five (38 per cent) were used to repay residential mortgages or remortgage existing equity release borrowing, financial advisor Key found. This major new trend developed as existing customers realised how they could benefit from the lower rates and increased flexibility offered by modern products driving a 174% year on year surge in rebroking, the firm said. City A.M.