ATM shake-up could leave many without cash

Cash machine ATM Picture

Plans to shake-up the UK’s ATM network may leave many remote areas with little or no access to cash, consumer group Which? has warned.

Link – which manages the network – says there are too many cash machines in places where they are not needed.

Which? said it could lead to “mass closures” of free-to-use machines.

According to the consumer group, more than 200 communities in Britain already have poor ATM provision, or no cash machines at all.

It said 123 postcode districts did not appear to contain a single ATM, making many consumers reliant on access in nearby villages or towns.

growth in ATMs
Image captionLink says the number of free-to-use ATMs has grown markedly

Examples include:

  • Postcode district PE32 in Norfolk (which has a population of 15,300)
  • TA7 in Somerset (14,980)
  • TN27 in Kent (12,400)
  • NR16 in Norfolk (11,950)
  • and YO13 in North Yorkshire (10,110).

Gareth Shaw of Which? said: “Link’s proposals could place a strain on communities across the UK that are already struggling to access the cash they need following mass [High Street] bank closures.

“The financial regulator must intervene to avoid this situation getting worse.”

He said that those hit hardest would not be busy high streets, but ATMs in rural communities.

Link says it wants to lower its fees to card issuers by 20% over the next four years, from 25p to 20p per transaction.

This would make it less profitable to run an ATM in many areas.

However, it says there are too many cash machines in places where they are not needed, with around 80% located within 300 metres of other ATMs.

Protecting communities

It said the number of free-to-use machines had rocketed from 36,400 in 2007 to 54,950 last year.

John Howells, chief executive at Link, said: “The UK has one of the largest free-to-use ATM networks anywhere in the world, and the number of free ATMs is at an all-time high and rising.

“We welcome the research produced by Which? and will review all of the areas that it has identified and take action if there is inadequate free ATM provision.”

He said the organisation would protect free-to-use ATMs that are a kilometre or more from the next nearest free cash machine.

It plans to extend its Financial Inclusion Programme, which subsidises ATMs in less affluent and rural communities.

Gender pay differences are smaller at younger ages, but increased from 40 onwards

Gender Pay Gap

The difference between what men and women get paid widens as women get older, new research shows.

The Office for National Statistics found pay differences were smaller at younger ages, but increased from 40 onwards, reaching a peak between 50 and 59.

It also found the gender pay gap was entirely in favour of men in every occupation.

The government said it was taking action to address pay discrepancies.

The ONS said the increased pay gap for older women could be explained by taking time out, possibly to have children.

It added: “When we modelled the factors that influence pay, the results showed that both men’s and women’s pay grow for most of their lives.

“Overall, women’s pay grows less than men’s and also stops growing earlier than men’s pay. This applies to both the private and public sectors.”

Mind the gender pay gap

What is the gender pay gap like where you are?

According to the agency, men’s pay increased by 10.4% to an average rate of £14.48 an hour between 2011 and 2017.

That compared with a 12% rise for women to £13.16.

On average, men were paid £1.32 an hour more than women last year, a gap of 9.1%, according to the ONS.

It found occupations with the smallest pay gap have almost equal employment levels between men and women.

Almost three in employees in the highest paid occupations, such as chief executives, were men, the ONS added.

Dawn Butler, shadow minister for women and equalities, said the government was failing to tackle the gender pay gap.

“There is still a lot of progress to be made in terms of gender equality and achieving equal pay is one of them,” she said.

But a government spokesperson said it was committed to eliminating pay discrepancies.

“Action taken by this government means that we are one of the first countries in the world to require all large employers to publish their gender pay gap and bonus data. This is not an option, it is the law.”

OECD chief: We have to make Brexit as smooth as possible

OECD Chief on Brexit

Ángel Gurría, the head of one of the west’s leading thinktanks and one of the most prominent supporters of remain during the EU referendum campaign, has said it is time to move on and ensure that Brexit is a success.

“We have no choice,” the secretary general of the Organisation for Economic Cooperation and Development said in an interview with the Guardian at the World Economic Forum in Davos. “We have to take action and make it as smooth as possible.”

Gurría said Britain would retain close links with the EU despite the vote to leave in June 2016. “There is a nearness and a closeness, 40 years of living as part of the same family. That doesn’t disappear with the stroke of a pen or because of a referendum.”

The OECD secretary general said his strong support for the UK to remain in the EU had been to no avail. But he said Britain needed to retain close links with the other 27 EU member states to minimise disruption.

“I was strongly against Brexit. I speechified against Brexit. I said a vote to leave would be a Brexit tax. I couldn’t think of anything stronger than that. I have family who are British citizens and who want to be citizens of the world and citizens of the EU,” he said.

“But we didn’t win. It was decided upon, voted on, confirmed by parliament. What we have to do now is make Brexit as least costly and as least disruptive as possible.”

Gurría said the UK’s history and geography meant it would always be an important trading partner of the EU and played down suggestions that Brexit would affect London’s position as one of the world’s three big financial centres. “The City of London is always going to be there and will continue to be important,” he said.

Last year, the Paris-based thinktank fuelled speculation that it wanted a second EU referendum when it said it would upwardly revise its gloomy economic forecasts for the UK if the Brexit vote was overturned. But Gurría said the decision had been taken.

“Let’s turn it around. Let’s take action to make it work. Let’s move on,” he said.

The OECD secretary general said the backdrop to the Brexit process was a global economy that was improving but yet to return to the growth levels seen before the financial crisis of a decade ago.

“We are not having a boom, we are having a recovery,” he said. “It has taken 10 years and we are still not back to where we were before. That should be sobering.”

Gurría said reforms to improve education and skills, and action to boost research and development, were important to make the global upswing sustainable. But he added that an OECD assessment showed that only half the growth-boosting measures promised by leading developed and developing countries had actually been delivered. “There seems to be some kind of reform fatigue,” he said.

He added that governments were putting off reforms because they were deemed less urgent now that their economies had started to grow again. “That will make the next crisis or the next bump in the road come closer,” he said.

Before Donald Trump’s expected appearance in Davos on Friday, Gurría said he was hopeful that the US president would “embrace multiateralism”.

Trump has threatened to pull out of the 2015 Paris climate change agreement and has withdrawn the US from the UN compact on migration and refugees, but the head of the OECD said it was important that action taken by America dovetailed with international efforts.

Gurría said these were issues that couldn’t be dealt with individually even by a country as big as the US.

“Doing it together works better,” he said. “Collective action is greater than the sum of the individual parts that go into it and the benefits to all will be greater than the effort that any one country can undertake.”

Critical Illness cover can make a difference

If you’ve ever turned down a recommendation of critical illness because you can’t see the value of it, this real-life case study might make you think again.

Peter Simpson is a successful commercial manager for a Berkshire-based firm. He’s married with three children aged 13, 11 and 9 and has a £297,000 mortgage. His wife gave up work to bring up the kids, making Peter the main breadwinner.

When he was 24, buying his first house, Peter had arranged to see an Openwork adviser who helped him sort out a mortgage and critical illness cover. Over the years, Peter’s circumstances changed; he got married, started a family and moved up the housing ladder. During that time he has stayed close to his adviser and updated his cover in line with his changing circumstances.

The value of critical illness cover
Peter has always been able to see the value of critical illness cover, particularly because his father had sadly died of cancer. Aside from covering his mortgage, Peter also wanted to make sure his wife and children would be OK financially if anything happened to him.

In December 2016, totally out of the blue, Peter had a stroke. He had stopped at a friend’s house on the way to work when he suddenly and unexpectedly experienced a terrible buzzing sensation at the back of his head. He lost the feeling in his right-hand side and his speech became slurred. Spotting something was obviously very wrong, his friend got him into the house and immediately called an ambulance. Within 45 minutes Peter was being treated in hospital with his wife by his side.

When he was back home recuperating, Peter started the claims process, which turned out to be extremely straightforward. After a few phone calls and emails Peter received confirmation that his policies would pay out in full and he could expect £380,000 in his bank account.

Avoiding the financial impact of serious illness
Thanks to careful financial planning and an appreciation of the difference a critical illness plan can have on the financial impact of a serious illness,

Peter and his family now have the freedom to make choices. They have been able to make two platform investments, one that would act as a pension for Peter’s wife, and the other to enable Peter, a higher-rate tax payer, to maximise his personal allowance every tax year. They have also reduced their mortgage and swapped it from interest only to repayment.

This case study highlights the importance of protection especially if you have a loan or you’re the main breadwinner. Please talk to us if you think you need cover, or you need to update your existing provision.

The ABC of a Junior ISA

The Junior Individual Savings Account (ISA) was introduced in 2011, 12 years after the launch of the original ISA in 1999, which recently celebrated its 18th birthday

In a nutshell, the Junior ISA is a long-term, tax-free savings account for children. It effectively replaced the Child Trust Fund and aims to enable parents to save a tax-efficient nest egg for their children.

There are two types of Junior ISA and your child can have one or both types:

  • A cash Junior ISA, where you won’t pay tax on interest on the cash you save.
  • A stocks and shares Junior ISA, where your cash is invested and you won’t pay tax on any capital growth or dividends you receive.

Managing the money
Only parents, or guardians with parental responsibility, can open a Junior ISA for under 16s, but the money belongs to the child. Until the child turns 16, the parent can manage the account if they want to make changes. For example, they could change the account from a cash to a stocks and shares Junior ISA or change the account provider.

The child takes over control of the account when they turn 16 and they can access their money from age 18 (when the ISA automatically loses its ‘Junior’ status).

Children aged 16 or older can open their own Junior ISA, as well as an adult cash ISA (with maximum contribution limits of £4,128 and £20,000 respectively, for the 2017-18 tax year).

Paying into a Junior ISA
Anyone can pay into a Junior ISA, but the total amount paid in can’t exceed £4,128 in the 2017/18 tax year and £4,260 for 2018/19. If you go over this limit, the excess is held in a savings account in trust for the child and cannot be returned.

During the 2017/18 tax if you have paid £2,000 into a child’s Cash Junior ISA you can only pay £2,128 into their stocks and shares Junior ISA. You can make contributions into a Junior ISA until the child’s 18th birthday.

Contains public sector information licensed under the Open Government Licence v3.0.

The tax efficiency of ISAs is based on current rules.
The current tax situation may not be maintained. The benefit of the tax treatment depends on the individual circumstances. The value of your stocks and shares ISA and any income from it may fall as well as rise. You may not get back the amount you originally invested.

If you’d like more information on Junior ISAs, please get in touch.

Monthly market update, Happy new year!

The bells rang and we moved into 2018 with the FTSE 100 closing at an all-time high. This is the second year in a row that the FTSE 100 has ended the year at its highest level.

The final session of the year saw the FTSE 100 close at 7,687.77, which was 4.9% higher than the November closing figure of 7,326.67.  This meant the index enjoyed growth of 7.6% in 2017, following its close in 2016 at 7,142.83.

Despite falling slightly in the final session, in the US, the Dow Jones Industrial Average continued its general upward momentum, closing the year at 24,719.22.  This was 1.8% above November’s closing level of 24,272.35 and was the ninth straight monthly gain, leaving March as its only losing month in 2017.

Over the full year, the Dow Jones Industrial Average enjoyed growth of an amazing 25.1% over its closing figure in 2016 of 19,762.60.

In terms of £ Sterling, it ended the year at 1.35 US Dollars.  While this was unchanged from the end of November, it was 9.5% higher than the closing figure in 2016 of 1.23 US Dollars.

Against the Euro, £ Sterling ended the year at 1.13 Euros, which was fractionally lower than the November closing figure of 1.14 Euros.  During 2017, the pound fell 4.1% against the Euro, having started 2017 at 1.17 Euros.

Inflation, as measured by the Consumer Prices Index including owner occupiers’ housing costs (CPIH), remained unchanged at 2.8% (this is based on November’s data which is reported in December).  The 12-month for the Consume Price Index (CPI) rate which excludes owner occupied housing costs and council tax, was 3.1% in November 2017, up from 3.0% in October 2017.  This is the highest it has been since March 2012.

The increase in interest rates during November helped long-suffering deposit savers slightly.  However, they continue to lose money in real terms when you consider the rate of savings interest compared to the rate of inflation.

The Omnis Managed funds, Openwork Graphene Model Portfolios and new Omnis Managed Portfolio Service provide you with a diversified asset allocation in line with your Attitude to Risk, investing in Developed Market Equities, such as UK, US, Europe and Asia Pacific as well as Emerging Market equities.  Cautious and Balanced investors will also have significant holdings in UK and Global Bonds, as well as Alternative Strategies.

We believe this multi-asset approach aims to give you the best opportunity for the highest level of return for your stated level of risk.

 

The bells rang and we moved into 2018 with the FTSE 100 closing at an all-time high. This is the second year in a row that the FTSE 100 has ended the year at its highest level.

The final session of the year saw the FTSE 100 close at 7,687.77, which was 4.9% higher than the November closing figure of 7,326.67.  This meant the index enjoyed growth of 7.6% in 2017, following its close in 2016 at 7,142.83.

Despite falling slightly in the final session, in the US, the Dow Jones Industrial Average continued its general upward momentum, closing the year at 24,719.22.  This was 1.8% above November’s closing level of 24,272.35 and was the ninth straight monthly gain, leaving March as its only losing month in 2017.

Over the full year, the Dow Jones Industrial Average enjoyed growth of an amazing 25.1% over its closing figure in 2016 of 19,762.60.

In terms of £ Sterling, it ended the year at 1.35 US Dollars.  While this was unchanged from the end of November, it was 9.5% higher than the closing figure in 2016 of 1.23 US Dollars.

Against the Euro, £ Sterling ended the year at 1.13 Euros, which was fractionally lower than the November closing figure of 1.14 Euros.  During 2017, the pound fell 4.1% against the Euro, having started 2017 at 1.17 Euros.

Inflation, as measured by the Consumer Prices Index including owner occupiers’ housing costs (CPIH), remained unchanged at 2.8% (this is based on November’s data which is reported in December).  The 12-month for the Consume Price Index (CPI) rate which excludes owner occupied housing costs and council tax, was 3.1% in November 2017, up from 3.0% in October 2017.  This is the highest it has been since March 2012.

The increase in interest rates during November helped long-suffering deposit savers slightly.  However, they continue to lose money in real terms when you consider the rate of savings interest compared to the rate of inflation.

The Omnis Managed funds, Openwork Graphene Model Portfolios and new Omnis Managed Portfolio Service provide you with a diversified asset allocation in line with your Attitude to Risk, investing in Developed Market Equities, such as UK, US, Europe and Asia Pacific as well as Emerging Market equities.  Cautious and Balanced investors will also have significant holdings in UK and Global Bonds, as well as Alternative Strategies.

We believe this multi-asset approach aims to give you the best opportunity for the highest level of return for your stated level of risk.

A Tax Update for Landlords

As a result of a challenging economic environment, the Chancellor has tightened the screws on a number of sectors and trading types. One sector that has been bombarded by changes is landlords and property owners.

In this article, we endeavour to summarise recent tax-related changes that affect people letting out or selling residential, second properties.

Mileage for private landlords

In the recent Autumn Budget 2017, the Chancellor announced that landlords would have a choice when calculating their motor running expenses. From 6th April 2017, landlords can now opt to use mileage rates to calculate their allowable deductions for motoring expenses, or stick with deducting actual running costs and claiming capital allowances.

Mileage is not available to landlords who are companies or in mixed partnerships (a partnership with both individual and non-individual members).

Selling properties owned by a company

When an asset is sold for a profit, part of the increase in its value is due to inflation. When calculating a capital gain for a company, you effectively convert the proceeds to what they would’ve been worth when the item was originally purchased. This is called indexation.

Indexation allowance for companies has continued to apply since 1982, but it will now be frozen from January 2018.

Lending

Buy-to-let lending legislation has also changed. In October, new rules introduced by the Prudential Regulation Authority made it more complicated to obtain lending to finance the purchase of an investment property, because lenders were forced to look at the feasibility of the entire portfolio; not just the property in question.

Letting fees

As part of the Autumn Statement in 2016, the government announced plans to ban letting agent fees for tenants in England. Currently, tenants are usually billed for tenancy agreements, referencing and credit checks.

A draft bill has recently been laid before Parliament so if the government proceeds with the ban, it is likely to come into effect in 2018.

£1,000 property allowance

You can get up to £1,000 a year in tax-free allowances for property income from 6th April 2017. If you own a property jointly with others, you’re each eligible for the £1,000 allowance against your share of the gross rental income.

If you’re already registered for Self Assessment, you can claim the allowances by deducting them from your gross property on your tax return. You can’t deduct any other expenses or allowances if you claim the property allowance. You can change which approach to take from year-to-year.

If you aren’t in the tax return system, you don’t need to register provided your property income is below £1,000, but you would need to keep records of your income. You can of course opt to complete a tax return if you have a loss to declare, which would make it easier to claim the loss in the future.

Capital Gains Tax

Capital gains tax arises when you make a “gain” when you sell or dispose of an asset. Normally, capital gains tax is charged at 10% or 20% depending on your tax rate, and capital gains tax transactions are reported on a tax return so you have 10 months from the end of the tax year to file the return online and pay any tax arising.

From April 2017, new rates of capital gains tax were introduced that only apply to residential property that isn’t your home. If your gains are within the basic rate band, 18% is now charged on residential property and 28% on any amounts above the basic rate band.

The government has also announced their intention to shorten the window for paying the capital gains tax on such transactions. But in the Autumn Budget 2017, it was announced that the introduction of the 30-day payment window for capital gains tax to be paid on residential property would be deferred until April 2020.

Restrictions to tax relief on mortgage interest

From April 2017, the offset of mortgage interest available to higher rate taxpayer landlords will be gradually reduced to the basic rate.

Under the four-year withdrawal of the relief, in 2017/18 landlords will only be able to apply the existing relief rules to 75% of their finance costs with the remaining 25% using the basic rate reduction. The following three years will see the proportion change by 25% each year before the basic rate cap applies in full from 2020/21.

Landlords who have small borrowings or are basic rate taxpayers, will be unaffected by the change. However, those who took advantage when access to finance was more relaxed, could be hit by the fall in their tax-deductible expenses- and therefore a rise in their tax liability.

This restriction applies to individuals owning properties – not companies. Corporation tax is currently 19% and set to fall to just 17% by 2020 under current government plans. Operating as a limited company may look attractive. However, the tax-advantages of being paid dividends have been slashed and there may be stamp duty and capital gains tax, so it is important to seek advice if you’re considering putting property into a limited company.

Stamp Duty surcharge on additional properties

As of April 2016, anyone buying a second property has been hit with a 3% surcharge.This means for someone buying a property worth £175,000 they’ll pay £6,250 rather than £1,000.

The surcharge is probably one of the most severe changes for individuals who own more than one property.

Removal of the Wear & Tear Allowance

From April 2016, the annual Wear and Tear Allowance was removed. This Allowance served to reduce property income and was available against lettings of furnished, residential properties. It was intended to account for the deterioration of the fixtures and fittings.

Instead of the Wear and Tear Allowance, landlords are now able to deduct the actual costs they incur on replacing furnishings in the property, but no tax relief will be available on the initial cost of furnishing a property. This relief is available to unfurnished and part-furnished properties, as well as fully-furnished.

Increase in Rent-a-room Relief

After 18 years of being at £4,250, ‘Rent-a-room’ relief increased to £7,500 from April 2016.

Rent-a-room relief allows you to let out furnished accommodation in your home, tax-free, subject to the threshold. The threshold is halved if you share the income with your partner or someone else.

The relief is open to anyone renting out room (i.e. a room or even an entire floor) in their home, whether they own the property or not. It is therefore available to people running bed and breakfasts and guest houses.

In the Autumn Budget 2017, the government announced it would publish a call for evidence to establish how rent-a-room relief is used and ensure it is better targeted at longer-term lettings.