We’re Finalists Again! – Moneyfacts Investment Life & Pensions Award 2019

We are excited to announce that Donald Wealth Management has been shortlisted for the Investment Life & Pensions Moneyfacts Award 2019 again.

To be chosen as a finalist means a great deal. We have been selected for providing quality services for all of our clients.

You can support our nomination by providing a testimonial, it takes less than five minutes and would be greatly appreciated. These submissions are assessed by the Moneyfacts judging panel to decide upon the final positions of the finalists.

Simply click here, select Donald Wealth Management and write a testimonial.

The testimonial survey will close at midnight on Friday 14 June.

We thank you for your support!

Moneyfacts

Pier-to-Pier: How The Sharing Economy Gets You Access to Luxury Boats

Few things send a clearer message to the world that you’ve made it than owning a yacht or other type of high-end boat. Boating can quickly become one of life’s great pleasures and thanks to the sharing economy, boats are more accessible than ever. This is due to the cost and hassle of boat ownership, which has led to a big growth in services that allow more and more people to rent amazing watercraft.

Most people don’t know that:

  • Most boat owners use their boats just 11 days a year.
  • Traditional boat membership clubs can get you access to a fleet of different types of watercraft.
  • Online services will link you to boat owners looking to rent their luxury vessels for anywhere from a few hours to several weeks.

Click the image below to read the article

boats

Other notes and risk warnings

This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.

Looking to Buy a Luxury Car?

Donald Wealth Management has teamed up with JBR Capital, the UK’s only independent finance provider dedicated solely to high end cars. Their specialist sector knowledge and flexible approach to underwriting makes them the leading lender in the High End Car sector, and they pride themselves on offering a truly bespoke, personalised service.

Through this relationship, we are able to provide bespoke, specialist finance for modern day cars, supercars, classic cars, historic cars and race cars. Because JBR are a direct lender, not a broker, they can make quick underwriting decisions, and we will work with them to make sure we arrange the right finance package for you.

Finance Options

Whether you’re a luxury car enthusiast, or a collector of classic or historic cars, we can offer flexibility and bespoke terms on a range of finance options, in particular for:

  • Clients looking for a discrete, personal service, avoiding the need to apply for finance at a dealership
  • Those with complex circumstances
  • Those needing a faster and cheaper alternative to short-term property finance
  • Those looking for auction or restoration finance

Releasing Equity

The high-value car market has achieved phenomenal growth in value during recent years, and for many clients one finance option could be to release equity currently tied up in a vehicle.

Through our relationship with JBR, we can arrange to release capital from a luxury car or collection, which can be used for any reason.

At a Glance

  • Services offered to private individuals and businesses
  • Purchase finance available for new or used vehicles
  • Refinance available for vehicle(s) worth £75,000 +
  • Capital raising: Equity release of up to 80% available against a car or collection valued at £100,000 +
  • When capital raising, the car always remains in the possession of the customer
  • Funding levels between £25,000 and £3 million
  • Fast turnaround times from as little as 24 hours
  • Bespoke, flexible finance options
  • Flat rates of interest from 3.49%
  • Term 12 months to 5 years

If you would like to talk to us about a finance package for a car purchase, get in touch here. We’d be happy to help.

 

In The News – February 2018

dog reading newspaperThe latest stories in the news for February 2018, which may be of interest to our clients.

London property price slump

 The London housing market is at a critical point, according to latest figures, with higher discounting by homeowners. Commentators have been swift to declare it officially a buyer’s market… for the small number of equity rich buyers who can afford a pad in the capital that is. The average home in London is now sold at four percent below its original asking price, up from just 0.5 per cent in 2014, with up to ten percent discounting not uncommon, the Hometrack Cities Index showed. Reflecting the shift in the balance of power the number of transaction in London have fallen by twenty percent in four years.

Confidence slowly returning?

Now Blue Monday is out of the way, payday has arrived and taxes have been returned, Brits are markedly more upbeat about their financial prospects for 2018 this month. GfK’s index showed UK consumer confidence rose four points to -9 in January, confounding fairly unanimous expectations that the reading wouldn’t shift above -13. Brits are slightly more optimistic about their own finances, though, than the wider economic situation. While a welcome shot in the arm it is worth noting that the index is still lower than this time last year, when it stood at -5, and still in negative territory.

IHT: legal loopholes not to be missed

The chancellor has asked the Office for Tax Simplification to review gifts in the inheritance tax system. In a letter published earlier this week, Philip Hammond said that the inheritance tax system was “complex” and needed an overhaul. He said a review could look at how current gift rules interact with the wider inheritance tax system, and whether the current framework causes any distortions. Whatever the outcome the take home on death duties is far exceeding Government expectation with £900m more than planned for collected in the next five years.

Beware hidden fund costs

Over the years there have been various campaigns that have urged fund managers to spell out their costs in full. The snappily titled Markets in Financial Instruments Directive 2 (Mifid 2) legislation is the latest industry effort to ensure this happens. One of the perennial gripes has been with hard to pin down ongoing charges (transaction fees associated with buying and selling individual fund holdings) which, when excluded, don’t properly reflect  the total costs incurred by investors. For the first time funds now have to publish trading costs and research by the Lang Cat show that for some of the best selling funds ongoing costs are up to thirty percent higher than the headline charge.

The £1m retirement tax trap

There are, some would say, punitive charges biting pension pots over £1m that can have a materially detrimental impact on retirement income unless avoided. Now clearly having a pensions pot in excess of £1m is a good problem to have but that doesn’t mean steps shouldn’t be taken to avoid unnecessary charges. Shifting the lifetime allowance (now at £1m, from £1.5m in 2006 when it was introduced) has made things tricky. Your pot will be tested against the lifetime allowance as soon as you start drawing on funds (or you reach 75). At this point an excess will be taxed at 55%. The Times puts forward a number of options such as asking your employer to stop contributing to your defined contribution pension as you reach the £1m mark – giving you cash to invest in an ISA instead.

Crackdown on high-cost credit

The Fund management and retail banking industries are not alone in feeling the pressure to be more transparent about costs. This week the Financial Conduct Authority (FCA) has made it clear they are concerned about expensive credit and have four areas firmly in their sites: overdrafts, catalogue credit, doorstep lending and rent-to-own products. Findings are set to be published in Spring but as a sign of the seriousness of its intent the FCA is already considering fundamental changes to overdraft charges – historically a big source of revenues to banks.

Has the bull stopped or is it catching its breath?

Huge inflows into global stock markets in January, coupled with last weeks ‘wobble on Wall Street’ has fuelled fears that a bigger sell-off could be around the corner. And history would indicate so with the current run one of the longest ever. To many observers, the headlong rush into stocks has the hallmarks of the death throes of a bull market and carries shades of the end of the dotcom boom.

Don’t expect another dividend bonanza year!

Headline dividends far surpassed expectations last year with 10.5% year on year increase to a record busting £94.4bn. Sterling’s strength is a key factor here, though, and tellingly Q4 was much weaker with dividends only growing 1.1% on a headline and underlying basis. Looking at 2018, most expect growth to be slower as the rebound in miners and exchange rate gains are unlikely to be repeated.

From growth to income – retirement portfolio challenges

The shift from accumulation to decumulation is a profound one in many senses and turning a pot (or pots) into a source of reliable income can complex.  The old ‘buy shares, live on the dividends’ mantra remains the doctrine for many but natural yield (i.e. not eating into the value of the investment) is becoming hard to find – forget about cash, dividends are increasingly under threat and bonds look really pricey. The Telegraph looks at how to get the balance right, common mistakes to avoid and assesses some leading income-producing investments.

Rising insolvencies

It is expected that across England and Wales, around 24,500 people will have entered a personal insolvency process in the fourth quarter of 2017 This would be an increase of nearly 7 per cent compared with the same period a year earlier and the highest figure in three years. A significant proportion was made up of individual voluntary arrangements, something that is a touch surprising given the relatively low levels of unemployment and the pressures creditors are under to give debtors more time to settle arrears. Experts point to the fact that wages are falling behind inflation and the interest rate rise to explain the annual increases in unsecured borrowing. It seems people are borrowing more to maintain standards of living rather than tightening belts a notch or two.

Stamp duty surge

It seems that the new surcharge on buy-to-let and second homes has done little (if anything) to quell the appetite of investors for the perceived security of bricks and mortar. £9.5bn was paid in stamp duty land tax last year, which was a significant 16 percent year of year increase. One of the biggest reasons stamp duty remains so high is the relative stagnation of housing transactions. The dichotomy is that a record tax take will likely act as significant break to Government action on stagnation and social mobility. The most powerful direct action would be the reduction of stamp duty – but it’s a nice little earner for the Government, leading many commentators to predict that the three percentage point surcharge is very much here to stay despite prominent campaigns calling for its abolition.

Pensions complaints overhaul

The Pensions Advisory Service’s dispute resolution function is moving to the Pension Ombudsman in the interest of better outcomes form a simplified customer journey. Customers will now be able to access all pension dispute resolutions, whether pre- or post-IDRP, in one place. The intention is to create a smoother journey and improved complaint handling for customers which will mean the time taken for complaints to be resolved will be halved.

Housing market continues cool down

Commentators are calling the end of the property boom, driven by some well documented  (interlocking) themes: economic uncertainty, stagnating sales and high prices. Prices increases of 4.8 per cent in 2017 represent the slowest increase in 5 years (dragged down by London and the south east in particular). On the flipside – and slightly unexpectedly – the number of first-time buyers is at its highest since 2016. Property had become so inflated that the average first-time buyer is now 30 years old and has a salary of £41,000 a year, so the shift is welcome news in some regards.

Bank of Mum & Dad to the rescue

It’s well reported that first time buyers increasingly have little choice but turning to their parents to get on the property ladder – helping save for a deposit and qualifying for a loan. Against this backdrop a niche mortgage product is coming to the fore that enables parents to help financially without triggering a stamp duty charge (which can happen as parents’ involvement invokes a charge on ‘second homes’). Joint-borrower sole proprietor mortgages allow family members to back a buyer financially without becoming a co-owner.

Interest rate rises – is Britain ready?

The decision to hold rates now came with heavy caveats that a rise is likely in May to tackle inflation. With global growth driving UK economic recovery and some evidence of wage growth, The Bank of England expects that bigger and more frequent (than anticipated) hikes may be required to tackle pesky inflation that refuses to settle. And experts believe the country is ready to handle it, with all the evidence pointing to consumers ready to borrow to spend rather than reducing debt.

Tax free childcare is here

All working parents with children up to the age of 12 can now apply for the Government’s tax-free childcare scheme, HMRC has confirmed. Parents who meet the scheme’s requirements can open an account online – that is then topped up by Government contributions. This is an extra 20p for every 80p paid in – hence the name ‘tax free’. However, this has previously been capped for children up to the age of nine. The programme gives eligible parents or guardians up to £2,000 free per child towards childcare costs each year.

Next generation of savers penalised by banks

Last year an OECD study on young people’s grasp of money issues around the world revealed one in five people are financially illiterate, incapable of grasping basic shopping conundrums – and we’re talking really basics, like “is that twelve-pack of Diet Coke better value than two four-packs?” Only 12% of 15-year-olds got the questions right. On average 22% had only the most basic financial literacy. Worryingly the trend among the UK’s main high street banks is for only children over 11 being able to have a full current account with contactless bank card for free. Sadly this is too late for a child who could well have already started secondary school and managing their own money via bus fares and dinner money. It’s never too soon to get engaged.

European Union growth

On the one hand the European Union economy grew at its fastest pace in a decade last year, (figures from the EU statistics office Eurostat have confirmed). On a more circumspect level the expansion – accelerated in the European Union’s biggest eastern economies – may have reached its peak, with economies operating at or above potential and central banks starting to raise borrowing costs. Feeding into the equation, unemployment is currently at record lows across the region with the suggestion that some companies may struggle to find workers, leaving orders unfulfilled.

Inflation inflation inflation

Inflation is not doing what it’s supposed to and everyone’s talking about it. By now (actually since November when we look back at forecasts) we should be on an inflation downhill. Gentle, granted, but definitely down. But the message doesn’t seem to have been received as it hovers at 3%, defying the odds and, when we strip out volatile and seasonal items in the consumer price index, core inflation is actually up a touch. The case is strengthening for almost inevitable interest rate increases until inflation starts with a two. It’s coming, the only question remains how soon and how much.

Wall Street forgets its woes for a week

As the spectre of inflation loomed Wall Street shrugged its collective shoulders and decided it was in rally mode regardless last week. A week is a long time in global stock markets and after the steepest of drops in equity prices Wall Street posted five straight days of gains. However commentators expect inflationary pressures to build with core producer prices already at an annual rate of 2.2% – close to a six year high – and most believe it is inevitable that the Fed will increase rates at it next meeting in March.

Pensions left unprotected

Three years ago, the Financial Conduct Authority introduced regulation that made it mandatory for contract-based pension providers to appoint independent governance committees to ensure pensions holders’ best interests are safeguarded.  However, a study by ShareAction (a charity promoting responsible investing) claims that only lip-service is being paid to protecting and growing savers’ funds. The claim is that the FCA has shirked its commitment to engaging in ongoing reviews of the committees to hold them accountable to their promises. A review was promised in 2017 but it yet to materialise.

The ‘Parent-sioner’ squeeze

Financial pressures and the housing market being what it is, mean that people are unable to get on the property ladder until much later into life – mid thirties not uncommon. Similarly delayed is having children as many more women are having children in their 40s. Last year the birth rate among women aged 40 and above surpassed that of women aged under 20 for the first time since 1947. These two trends (and many others) are mean the advent of being in your 60s with children under the age of 18 is becoming far more common – new research suggests that in just 10 years there will be 1 million such UK “parent-sioners”, compared to 400,000 today. Traditionally the over-55 period is when things calm down financially. It’s also the period when many people start shovelling their money into a pension (or maybe a buy-to-let) to take advantage of tax reliefs. But as the trend to having children later in life continues it’s not really clear when and how this generation will be able to put anything extra into their pensions.

 

This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.

Cutting the Costs of Divorce

Divorce can be a costly business… but does it have to be? This is how one particular solicitor’s practice is helping to minimise the financial and emotional cost of divorce for his clients.

Divorcing Well

“The reason costs often spiral…” explains Phil Barnsley, head of the renowned Family department at Higgs & Sons Solicitors, “… is that couples often find they are unable to reach a mutually acceptable agreement over crucial matters such as children, houses and of course, money. And where issues remain unresolved it is often left to the Courts to decide the outcome.

“This is where costs can escalate.”

So is it inevitable that splitting up from your spouse has to be so costly – emotionally and financially?

“We work hard to ensure that divorce is as stress free as it possibly can be given the circumstances,” continues Phil Barnsley, a Partner in the Midlands based law firm. “Of course separation and divorce are traumatic, but we are fully committed to helping people through those difficult times. We firmly believe that anyone going through divorce should always feel in control, informed and reassured.”

Higgs & Sons’ lawyers strive to find the right pathway for clients and their families, one that will result in a fair and lasting outcome for all involved whilst protecting what is important to their clients. And one of the tools they use is the Higgs Guide to Divorcing Well.

Primarily aimed at professional advisors such as IFAs and accountants, Higgs’ easy to use guide highlights the various alternatives to Court that are available to couples, stressing that all options should be explored before deciding on the most appropriate pathway given the individual circumstances.

Phil Barnsley again: “It was interesting that when we launched Higgs Guide to Divorcing Well, one of the statistics we quoted was that according to the Office for National Statistics (ONS), 34% of divorce cases in the UK in 2015 ended in court hearings.

Philip Barnsley - Higgs & Sons - divorce lawyer

Phil Barnsley launching the Higgs Guide to Divorcing Well in Birmingham, 2017

“However, by using the various options and strategies we have developed through our many years of experience; in that same period, Higgs & Sons issued court proceedings in only 4% of cases.”

Higgs Guide to Divorcing Well encapsulates the approach taken by the team at Higgs which has helped them produce outstanding settlements and more controlled legal expenditure for their clients. It has also allowed families who were going through intensely stressful and potentially damaging situations, to feel more in control and much better able to build lasting relationships with estranged partners and families.

“The ONS statistics also highlighted that 64% of children whose parents divorced were under the age of 11. The physical and emotional well-being of children is paramount in any situation and we believe that a better divorce can help to lessen the impact on them,” comments Phil.

The Higgs Guide to Divorcing Well shows how a client-centred approach can help divorcees maintain control, manage outcomes and keep a tight control of costs. And with the average UK divorce taking around 18 months, it is no surprise that the costs to those families – both emotional and financial are potentially huge.

“Our guide offers a new, innovative approach to divorce that demonstrates not all roads need to lead to costly litigation. We believe it provides an invaluable reference point for anyone who may be experiencing or considering divorce.

“As advisors we must always consider which route is right to meet the goals of our clients and their families. Getting this right at the outset will often determine how successful and lasting those outcomes will be. The Higgs Guide to Divorcing Well provides the perfect vehicle through which these goals can be achieved.”

To receive a copy of Higgs Guide to Divorcing Well, or to speak to a member of Higgs & Sons’ Family team, go to  www.higgsandsons.co.uk/services/family or call 0345 111 5050.

Higgs & Sons logo illustrating article about divorce

This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.

In The News – January 2018

dog reading newspaperThe latest stories in the news for January 2018, which may be of interest to our clients.

HMRC bans personal credit card payments

As HMRC will no-longer be able to pass on the cost of card handling fees, payment of tax bills by personal credit card will no-longer be permitted. The ban comes into force from 13th January, though debit cards and corporate credit cards are still allowed. This has caused some consternation among the 0.8% (454,000) of taxpayers, who prefer to spread their tax bill using a personal credit card, as HMRC only sent written warnings with tax bill reminders in December.

Investing in 2018: Europe and Emerging Markets

 Most industry experts and commentators anticipate a year full of opportunity for investors even if sterling strength reduces Brits’ global returns a touch. Though fears simmer in relation to high price/earnings ratios, markets reaching new highs and minimalistic volatility most asset managers expect Europe to produce the highest returns this year.  Emerging markets (which delivered some of the highest returns in 2017) are also earmarked as a promising area as American markets have lost some of their appeal.

What MIFIDii means for you

 Despite Brexit, an EU directive will come into force this month that is designed to increase transparency and reduce costs for investors. Meet MIFIDii (not Miffy!) the snappily entitled Markets in Markets in Financial Instruments Directive. MiFID II’s overarching remit is greater investor protection which it will achieve by targeting the processes of asset managers, banks, brokers and exchanges. It touches on investment advice, how products are sold and regulated, as well as information and costs. In simple terms, this means greater transparency over the way funds are sold and a downward push on costs for retail investors.

Crypto currencies: craze, phase or stays?

The world’s most famous cryptocurrency smashed an array of price records in 2017, taking the flight of Bitcoin to a stratospheric level with its price rising by more than 1,400pc. Against the clamour The Telegraph takes a look at the top ten performing cryptocurrencies – 6 of which have experienced higher growth levels than their more famous, though flawed, forerunner Bitcoin in 2017. It is these flaws (in particular the high transaction fees and resource required to make sure payments are made quickly) later rivals are aiming to iron out. The article takes a closer look at two cryptocurrencies analysts believe are worth watching this year: Iota ($9.5bn) and Cardano ($10bn).

Next generation advice

Prophesies that robots would soon take over the world of financial advice have proven ill founded. According to consumer site Boring Money, robo advisers accounted for less than 1 per cent of the UK’s £192bn non-advised online investment market at the end of the third quarter of 2017. What’s held back take-up? Well it seems that algorithms to deliver low-cost automated services to the masses aren’t quite enough. In matters of money management, people still want some level of human interaction which is leading to a new breed of “robos” who are morphing their business models to provide over-the-phone and face-to-face advisory services. Less DIY, more DIWM (Do it with me).

UK Economy in fair health

 There is some good news among Brexit gloom (or at least fatigue) as latest data indicates the UK economy accelerated faster in the fourth quarter of 2017 than had been forecast. This is largely thanks to a motoring services sector that posted better-than-expected performance last month. The IHS Markit/CIPS services purchasing managers’ index (PMI) showed a reading of 54.2 in December, up from 53.8 in November, with economists pencilling in a figure of 54. A reading above 50 indicates growth

House price growth slow but not dead

UK house price growth increased 2.6% last year, confounding doom-mongers who prophesied a slump in the wake of Brexit. Yes growth has slowed, with the 1.9 percent drop in increase between 2016 – 2017 in part due to the rising pressure on household incomes… but growth is growth.  Of interest, the Times highlights that a notable exception is London where prices fell for the first time in eight years, according to Nationwide.

Pensions 2018

Many people could be in for a shock when they check their pay packet in April 2018. That’s because a bigger slice of their pay automatically diverted to a savings pot for their pension. Automatic enrolment went live in 2012 and but the total minimum amount paid in is currently just 2% of qualifying earnings. However, on 6 April this will rise to 5% – typically 2.4% from the worker, 2% from their employer and 0.6% in tax relief. The Mail asks could this be enough to tip people out of inertia an trigger an increase in opt-outs?

Open banking – the end of traditional banking?

Open banking is just around the corner. From January 13, Britain’s nine largest banks and one building society will be required to make customer account data available to approved rivals. A secure set of online technologies will essentially allow bank customers to authorise third parties to access their account details. The bold vision is that the new regime will loosen monopolistic grips, even up the playing field and, in particular, present a significant opportunity for challenger banks and fintech (financial technology) businesses who will be able to compete on a more-or-less level playing field. Interestingly five banks have admitted they will not be ready for the deadline.

Taxing Times

The good news for those dealing with inheritance tax is the (from April) increase on the ‘main residence nil-rate band’ – the amount you can receive before tax from the property that was the deceased’s main residence. The amount will rise from £100,000 to £125,000 per person – giving individuals £450,000 and couples £900,000 tax-free inheritance. This at the time the Times highlights that HMRC last year increased their inheritance tax take by nearly 15 per cent. Against the backdrop of a much more aggressive approach towards tackling avoidance experts underline doing the simple things will be key.

Crowd based capitalism

The term “crowd-based capitalism” is a catch all to describe what is also known as the sharing economy, gig economy, on-demand economy, collaborative economy, renting economy, or peer economy. The Independent looks at how the sharing economy is taking underutilised assets and making them accessible online to a community, leading to a reduced need for ownership of those assets. These platforms (think Uber, AirBnB et al) are redefining the way consumers find, use, and pay for services, as well as how they engage with, assess and award service providers.

Brexit: no buyer’s remorse

There was a theory (snobbish and a bit nasty though it possibly was) that those who had voted to leave the EU would quickly regret what they had done as the Treasury mooted economic apocalypse came swiftly to pass. The hypothesis followed that most Brexit voters would soon be clamouring for the chance to think again. For buyers remorse strategy to have worked, the economy would have had to contract sharply and for unemployment to rocket – something equivalent to 2009 and something that has evidently not happened.

The end of rip-off charges?

 While companies and service providers can no-longer charge customers for using a credit or debit card there are a range of unintended consequences that highlights the tendency towards ‘sound-bite-grabbing’ politics. Yes so-called rip-off charges may now be outlawed but one immediate effect of the new law is that it is no longer possible to pay your tax bill online direct to HMRC. Many retailers, especially the large ones, will of course simply find other ways of passing the costs on.

ISA slump

Cash Isas have been a popular go-to savings account for people who are looking to take advantage of their tax-free allowance, but since the Bank of England cut interest rates to 0.5 per cent in March 2009 cash Isa rates and savings rates generally have dwindled. With a historic low of 0.93 per cent returns, Cash Isas experienced their worst year on record in 2017, with average returns at In contrast, the average stocks and shares Isa returned 11.75 per cent. Until either the personal savings allowance is withdrawn or challenger banks shake things up don’t expect much to change.

Income Investing for 2018

 Real interest rates globally are hovering around historic lows and although the Bank of England has for the first time in a decade moved interest rates up by 25 basis points, the underlying economic fundamentals indicate that this hike is likely to be a one-off and that rates are expected to remain well below historic norms for the foreseeable future. Against this backdrop The Telegraph looks at the options to achieve meaningful returns without unduly compromising levels of risk within a portfolio. Key Sectors to look at for dividend growth this year are: mining, banking, insurance, oils and gas, tobacco, utilities, consumer staples and pharmaceuticals.

House prices to flatline

 While house price growth stayed positive last year (despite the negative mood music) the harbingers of doom (experts) believe that won’t be repeated in 2018, as the twin spectres of Brexit and rising interest rates put the brakes on the property market. Most are warning homeowners to prepare for an underwhelming and subdued 2018, with a number of leading commentators predicting UK house prices will either stay flat or perhaps rise by 1% or so. The FT points out that if growth stays below inflation for the next three years house prices will, though, will revert to their historical averages… which might not be a terrible thing.

Over 65s drive UK spending

 U.K. household spending — excluding mortgage payments — rose to £554.20 pounds per week in 2017, climbing back to pre-crisis levels of more than a decade ago for the first time, according to a report by the Office for National Statistics – that’s an increase from £533 the previous year. Transport accounted for the biggest proportion of expenditure at £79, more than housing and recreation. Both transport and recreation rose by more than £5 a week each. Of note, 65-74 year olds spent more than double than under 30’s on culture and recreation (a fifth of their disposable income).

Tax rise for under 50s on the horizon?

The Government Actuary’s Department (GAD) said the state pension fund, which is funded by national insurance contributions is under considerable strain due to Britain’s ageing population.

The GAD believes that “class 1” contributions from employers and workers need to rise from the current 22 per cent to 27 per cent by 2035. This would result in national insurance contributions from these groups raising from £90billion to about £113billion.

Pension-led funding for small businesses

Despite the relatively benign economic impact to date the impact of Britain’s decision to leave the EU has had a big impact on uncertainty among businesses. Add that to a mix of higher costs, weak domestic growth and lacklustre consumer demand and it’s clear that optimism has been dampened among British small businesses – the Federation of Small Businesses said confidence among members fell to four year low of -2.5 in the last quarter of 2017. Against this backdrop the Mail explores how personal pensions could help fund small businesses by an injection of capital. Pension-led funding and it is an option available to business bosses who have either a self-invested personal pension (Sipp) or a small self-administered scheme valued above £50,000.

An antidote to Blue Monday

AS the Christmas becomes a distant memory, and we peak at the festive bills (and the festive bulge) some bright sparks have dubbed the 15th January ‘Blue Monday’ where a series of forces coalesce to make us all feel incredibly sad. The FT provides an antidote in the form of some useful money saving tips to combat the woe if you’re looking at a holiday, namely 1) clearing your cookies that holidays and travel companies used to raise the price 2) Never buy an excess waiver from a car hire company 3) make sure you book your travel insurance to start the day you buy your holiday.

Sterling in 2018

The Euro is unlikely to post large gains versus the British Pound in 2018 according to experts as they set out their forecasts for coming months. There is certainly a more constructive tone to forecasts for the Pound at the start of 2018 when compared to the same time – Its revival, currency analysts say, reflecting growing optimism in the markets about a “soft” Brexit. The Times point out though that Sterling remains vulnerable in this environment and that the rollercoaster has a long way to go.

Bitcoin bites would-be property owners

Many younger investors who have enjoyed a whopping windfall on Bitcoin have been trying to channel their new-found fortune into UK property having converted their profits to Sterling. However, mortgage lender and brokers have been turning would-be investors away for fear of breaching ant-money laundering regulations. The trouble has come from satisfying the challenge of tracing the source of the money. This is, of course, where the advantage of cryptocurrency not being regulated by a central bank, becomes rather more a hindrance.

Tax rise in insurance products

The removal of capital gains tax indexation allowance (for Insurers) doesn’t sound like anything to worry about, unless you are on the board of an insurer. But policyholders may stand to be left, indirectly, with lower returns as insurers complain of what they are calling a £250 million annual stealth tax.

Paradise lost

The paradise payers raised more questions than than answers but one certainty, as reported by the Guardian is the sheer volume of tax-avoidance schemes (particularly those including creating offshore accounts in tax-free countries) are being offered to the wealthy like never before. Tax avoidance has never been more commoditised and commentators have highlighted some (pre-panama / paradise) emboldened intermediaries offering packages like packaged holidays.

This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.

The Three Key Longevity Practices That You’re NOT Doing

The following content is provided by Dr Dan Carlin, the author of The World of Concierge Medicine, who has very kindly agreed to share some tips related to health and longevity. If clients would like a copy of his book, please let us know and we can provide a PDF version.

The three key longevity practices that you’re NOT doing

There are three main longevity practices that most people are not doing: 1) limiting refined carbohydrate intake, 2) increasing the amount of greens and other vegetables in their diet, and 3) most importantly, taking an objective look at their own family history. Each of these is important for its own reasons, but together they help prevent a large number of aging-related diseases.

Limiting refined carbohydrates

I get asked a lot about what types of food are the worst for your health, and my answer is always the same: refined carbohydrates. Quickly digested sugar and white flour damages cells by providing glucose in overabundance and its subsequent rapid metabolism creates excessive free radicals that result in accelerated cellular aging and death.

Increasing vegetable intake (especially green vegetables)

Conversely, I’m also asked a lot about the best foods to eat, and for that question my answer is always green vegetables. Spinach, kale, broccoli, romaine—the darker the green the richer it is in vitamins and minerals, all of which fight the free radicals that damage cells. The fiber in this food is also a natural way to ensure a healthy GI biome.

Knowing your family history and making a plan

Lastly, and most importantly, I encourage everyone to research and learn the specific medical issues that affected your fellow siblings, parents, grandparents, aunts, uncles and cousins. Specifically, you should search for conditions like heart disease, cancer, stroke and early dementia or Parkinsonism. Though this may seem a bit morbid, knowing your family history lays the groundwork for a plan to assess the medical risks that you too may have inherited. Once you have this information, talk with your primary care physician about it. He or she should help you make a plan for how you will assess and prevent the diseases that have afflicted your family in the past. If you can’t get a lot of information on your family or want to take it to the next level, consider getting your genome sequenced. Though we still have a long way to go with understanding the predictive risk potential of the genome, there is enough verified hard science today to make it worthwhile.

Maintaining just these three habits will create a powerful impact on your longevity, and you’ll be far ahead of the health curve. By applying these simple interventions, you can set the stage for a healthy body and brain and vibrant activity for years to come.

Other notes and risk warnings

This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.

A New Year Message from Jamie Donald

Click below to watch Jamie’s New Year message to all clients and contacts.

A Christmas Message from Jamie Donald

Click below to watch Jamie Donald’s Christmas message 2017.

Christmas Message 2017

Wishing all clients and contacts a very Merry Christmas and thank you for your continued support.

Our offices close for Christmas on Wednesday 20th December and reopen on Tuesday 2nd January 2018 at 8.30am. If you contact us during the Christmas break, please leave a message and we will return all calls as soon as the office reopens.

 

In The News – December 2017

dog reading newspaperThe latest stories in the news for December 2017, which may be of interest to our clients.

Who will benefit from Stamp Duty cut?

The Chancellor’s decision to scrap Stamp Duty on property purchases worth up to £300,000 for first-time buyers gives them a theoretical gain of up to £5,000 (the duty payable on a normal £300,000 purchase).  But the average FTB purchase is £165,000, and on this the cut in Stamp Duty delivers just an £800 saving. Moreover, the Office for Budget Responsibility, using data from the ‘stamp duty holiday’ after the financial crisis, says most of the benefit of the cut will be captured by property owners, and it expects house prices to be slightly higher as a result.

Do the sums on cashback mortgages

Cashback mortgages have enjoyed a surge in popularity, says the Independent. It reckons there are 1,200 different offers on the market, and the average cashback today is  about 10 per cent higher than a year ago at £409, but that buyers need to do their sums to work out when they really deliver a better deal. Often, it says, a bigger cashback amount can make a 2-year deal at a higher interest rate better value than a rival one at a lower rate. But for those seeking a big mortgage,  the interest rate cost usually outweighs the cashback.

What’s in their black box?

Telematics – the use of a ‘black box’  to monitor driver performance by insurers – is surging in popularity, says the Telegraph, with over 750,000 cars in Britain now monitored in this way. And the black box can cut premiums, especially for younger drivers. But each insurer has a different set of algorithms that measure performance and deliver the score that sets the driver’s premium. And drivers have no way of using the data gathered by their existing insurer to get a quote from another insurer at renewal. The Telegraph says it’s time the rules were changed to give drivers access to their data.

The savvier Xmas gift

Consider investment company plans as an alternative gift for children, says the Sunday Times. The average investment company would have converted a gift of £100 made 18 years ago to nearly £500 today, while £100 each year for the past 18 years would now be worth £6,200 compared with £2,100 if it had been put in a deposit account. Many of the 16 companies offering gift plans have monthly minimums of £25 and lump sums start from as little as £50. If you set up the plan as a ‘designated account’ then you can decide when the child gets the money – it can be later than age 18, which is when they have to be handed the cash if you use a Junior ISA for their savings.

Londoners spend half their pay on rent

While the average tenant in England and Wales paid 27 per cent of their gross salary as rent in 2016, Londoners had to give up an eye-watering 49 per cent of their gross pay, reports the BBC. In Wales, the proportion could be as low as 18 per cent and 23 per cent in the North of England. Lord Bird, founder of The Big Issue, is leading a campaign to have tenants’ rent payments included in the data used to give credit scores to mortgage applicants.

Small step forward for cohabitation

There has been a small step forward for the rights of cohabiting couples, says the Sunday Times. The Court of Appeal ruled that unmarried people may be entitled to statutory bereavement damages, which are worth up to £12,980 – though it will require a change in the law to bring this into effect. Cohabitees, whose numbers have more than doubled from 1.5m in 1996 to 3.3m now, are much worse off than married couples, especially in relation to inheritance tax.  IHT is normally levied at 40 per cent on assets worth more than £325,000, including property. The amount below this threshold is known as the nil-rate band. Any unused IHT nil-rate band allowance can be transferred to a surviving spouse or civil partner, allowing them to pass on £650,000 free of tax when they die. Cohabiting couples cannot do this.  In addition, the new residence nil-rate band applies only to married couples and civil partners. This adds a further £100,000 to the amount someone can pass on free of IHT to a child, grandchild or other direct descendant if their estate includes their main home.

HMRC gets heavier with penalties

HMRC has got a lot of publicity for its proposal to replace penalties for late filing of tax returns with a ‘points’ system like driving licenses, says the Times. But in practice it has been imposing more penalties for ‘deliberate errors’ on tax returns – the number of these penalties rose by 19 per cent in 2016. The penalty can be between 20 per cent ad 70 per cent of the tax due. Moreover, once you’ve had a penalty imposed, HMRC can monitor your affairs for several years, and you can be ‘named and shamed’ on the HMRC website.

Another tax hit for BTL investors

The Budget concealed yet another tax hit for Buy-To-Let investors, says the Times. The Chancellor eliminated the ability of companies to uprate the cost prices of their investments in line with inflation with effect from April 2018. This brings the treatment of company gains in line with personal gains, and will bring an estimated £2 billion in extra tax over the next five years. It’s a blow for BTL investors who hold their properties inside a company. Up to 200,000 landlords have set up companies to hold BTL properties since the rules were changed and reduced their eligibility for tax relief on mortgage interest, while a further 500,000 landlords are estimated to be considering incorporation.

Woodford backs UK as investors question performance

Star fund manager Neil Woodford has been under pressure following over a year of poor performance by his flagship fund, says the Financial Times, which ran a long interview with the manager. He admitted to being worried but repeated his conviction that his decision to buy more shares in UK-focused businesses like housebuilders was right. He said: “People have become so extreme in their view that Brexit is a pre-determined disaster for the UK economy, that the share prices are discounting literally economic Armageddon for the UK economy.” He discounts the notion of a ‘cliff-edge’  disaster if the Brexit deal is not right, saying that is just not how the world works.

Better parental leave

The insurer Aviva has altered its parental leave policy and now offers both parents up to six months of paid parental leave, says the Financial Times. The company’s 16,000 employees can take the leave at any time in the first 12 months after the child’s birth. Its previous policy – a maximum of 4 months for women and 2 for men – was more typical of what most employers offer.  Statutory rights are much lower. Trade Unions welcomed Aviva’s move.

The real problem with university costs

Writing in the Financial Times, moneysavingexpert Martin Lewis says: “With higher inflation, bizarrely the biggest practical problem with student loans is that the debt isn’t big enough. It’s time to change the debate. The cost of living crisis is the problem, and even cutting tuition fees to nothing wouldn’t solve it.” His point is that the tuition fees are covered by loans, but students’ living costs aren’t – what they get depends on their parents’ income-  and the way parents are assessed for contributions mean that those with more than one child at university are penalised. Yet this isn’t made clear either to students or their parents.

This article contains the opinions of the authors but not necessarily Donald Wealth Management (the Firm) and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. It is not a promotion of Donald Wealth Management’s services. Donald Wealth Management strongly suggests that no investor should act on any of these ideas without first seeking financial advice.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated. The value of an investment is not guaranteed and on encashment you may not get back the full amount invested. Errors and omissions excepted.

Donald Wealth Management is a trading style of Donald Asset Management Limited which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN: 223784). Donald Asset Management Limited is registered in England and Wales under Company No. 4675082. The registered office address of the Firm is: Stable End, 12 Heather Court Gardens, Four Oaks, West Midlands, B74 2ST.