Dales: Independent Financial Advisers Nottingham and Newark

NEW Mortgage Comparison Tool

2011-12-16T09:27:00.001-08:00

Our New Mortgage Comparison Tool is now live on the Web site:

The system can either show you a Best Buys Table based on a set of questions or you can drill down and to a more specific range of products suited to your needs. You can then select the mortgage you like the look of and select the email button. We will then help check that you fit criteria and help submit your application.

The tool, compares the whole of the market, but only uses a small selection criteria to produce a snapshot of the products on the market and as such can not and does not offer advice. Please contact us to ensure that the mortgage is suitable for your needs and that you fit criteria DALES IFA are an Independent Mortgage Adviser.

Please Contact DALES IFA at our Newark office 01636 642 844 or Nottingham 01158 320 265 or email advice@pndales.co.uk

Authorised and Regulated by the Financial Services Authority

Things we don’t want to talk about 101 - Savings Plans

2011-06-02T03:14:00.000-07:00

Thinks we don’t want to talk about 101 – Savings Plans

I had an interesting conversation yesterday with an unhappy Saver, not mine I hasten to add.

The gent in question had been saving regularly for 15 years. He was justifiably upset that after 15 years he was about to get less back at maturity than he had put into his savings plan over the whole term. It raises two questions:

Our understanding of the risks we are taking
The purpose of savings
What if you had not started the plan in the first place?

I know that’s 3, but I’ve always been a fan of the Spanish Inquisition

Dealing with each point in turn.

1. What did you understand of the risks when you took out the plan? Did you expect any risks, did you understand the relationship between risk and reward.

Most of us take risks everyday and most are calculated risks based on our experiences. Usually we know, that generally the higher the risk the greater potential for reward but also at the same time we know the greater danger of failure or loss. We learn this as children whether it be stealing sweets from the pantry or showing off a new trick on your bike, before you’ve really nailed it.

2. The purpose of savings.

I know this sounds like a silly question, but I’m not sure if we really take much time to think about it when we set out to save. I wonder if sometimes we save just because we know we should. I think at present there are a lot of people saving because the media keeps telling us we’re all in trouble now, and that its all our fault for not saving enough.

3. Where would we have been if we didn’t save?

Now this requires a little latitude: forget for a minute that the Savings plan gave us less than we had put in, we’ll come back to it later.

If Mr A had not started two £25 pm savings plans, 15 years ago, would he now have £8,000? In my experience the simple answer is NO, and a resounding no at that. Therefore, from this sense it could be suggested that the savings plan has worked. Indeed if Mr A had placed £25 each into a Mr & Mrs A’s bank account each month would they have more? Theoretically yes, but this assumes he continues to pay the same money each month, and that he bit his lip every time he thought about how much it was worth, and every time he walked into a shop and saw a new shiny thing or needed a new car etc. etc.

The thing is Saving Plans have a place; they are fire and forget you start them well within your means, and they run for a specified time. You get a statement once a year, which you soon forget because to start with they are going to be worth very little. Then all of a sudden the years tick by and “Thump” a cheque lands on your door step. “Here is that money you forgot about”.

You see, the thing is, you don’t start saving because you can’t afford to and if you don’t start saving you don’t have any savings.

When you start to think about it most of us, yes I really mean most of us, can afford £25pm. Even those with low incomes will soon grow accustomed to £25 less each month. £25 soon disappears, its less than the average take out, or a few drinks on a Friday at the village pub.

One last thought:

Savings Plans don’t have to be endowments, or have life cover within them; they can be tax efficient savings such as ISA’s. However, think about this: If your goal is to have some money to help your children out when they need to buy their own place or maybe get married, or even getting political, pay off their student debts. What happens if you die half way along?

The old style savings plan, the terrible much maligned endowments of the last millennium made sure the money was there whether you reached maturity or not.

The unscrupulous mis-sold them, manipulating the rules, growth rates and such, earning big money but there are many people out there that did very well from them.

Notwithstanding this: The message is clear, start saving, small amounts soon rack up, and 15 years is not that far away.

The only thing we spend but can never get back is TIME!

Philip Dales Cert PFS

Director.

For more information or advice on Savings Plans, ISA's and other investments contact Philip Dales at DALES Independent Financial Advisers: Advice@pndales.co.uk, or go to our web site www.pndales.co.uk. Nottingham office: 0115 832 0265 or Newark Office: 01636 87 00 69

DALES Independent Financial Advisers, Nottingham & Newark. Authorised and regulated by the Financial Services Authority: 496107.

MORTGAGE BEST BUYS, 2 year deals

2011-05-11T11:16:00.000-07:00

Mortgage Best Buys - 11th May 2011

Current 2 year best buys, based on a 65% Loan To Value.

FIXED RATES

TMW (The Mortgage Works) - 2.75% fixed until 31/07/13 - total fees of £1,036 (in valuation)

Woolwich - 3.08% with a 20 month Fixed rate - total fees of £948.93

L&G - Leeds Building Soc with a 4.69% fixed until 31/05/2013 - total fees of £559 (inc valuation)

Newcastle Building Soc with a 4.64% fixed until 30/06/2013, but the fees increase to £1,350 (inc valuation)

Trackers

Coventry -2.29% - bank base +1.79% for 25 months - total fees of £1,012

Nationwide - 2.75% - Bank Base +2.25% for 5 years fees are very low at £124

These are just best buys, they are only shown as an example of the type of rates available, you should always seek advice when buying a mortgage. As Independent Financial Advisers, we are able to select and advise from the Whole of the Market.

The loans above are based on a 65% loan to value on a house costing £250,000.

You may not fit the criteria of the above lenders.

For Further information, or advice

Contact:
email: advice@pndales.co.uk
phone: 01636 642 844 or 0115 832 0265.

PNDALES LTD are authorised and regulated by the Financial services authority. You home may be at risk if you fail to keep up payments on any loan secured against it. PNDALES Ltd a typical fee for mortgage advice is £350, the precise amount will depend upon your circumstances

Web site update due soon

2011-05-11T10:56:00.000-07:00

Long time no post,

We're in the middle of a major site redesign right now, and will update the blog as and when we expect the site to go live.

Within the new site will be an annuity comparison tool, you will be able to enter the value of your pension fund and find out who will give you the best annuity. A similar tool will exist for life cover, and you will be able to apply for cover online. A mortgage comparison tool will also be added.

With all three of these systems they will as you would expect from DALES independent financial advisers, search and compare the Whole of the Market.

However, it is always worth discussing your situation with an adviser before going ahead. Often with a mortgage while you may see a deal that looks fabulous, its important to remember that even our comparison tool, can not take every part of your situation into account, and has to make some assumptions. Annuities are slightly different, for example your pension may be a S32, and as such not all providers will accept an open market option, or immediate pension purchase, without affecting the level of Tax Free Cash you may be entitled to. With Life cover there is less of an issue with acceptance criteria, here it is more to make sure you buy the most cost effective solution for your situation, is level term assurance or Family income benefit better for your situation? Speak to one of our advisers and we can guide you through the variety of options.

We have offices in both Nottingham and Newark tel: 01636 642 844. DALES Independent Financial Advisers - advice@pndales.co.uk www.pndales.co.uk

Things we don’t want to talk about 101 - Funeral Plan Advice

2010-09-27T07:04:00.000-07:00

Things we don’t want to talk about: 101 - Funeral Plan Advice

A client of Dales Independent Financial Advisers recently asked for some advice on a funeral plan. It made me think about my own experience a few years ago on the death of my Farther in Law, what is available, what are the benefits and who needs to consider such a plan.

First things first: just how much does it cost to die in the UK these days?

On average it costs anywhere between £2500–£5000, depending upon either, where you live or how basic the funeral is. From my personal experience, for the most basic funeral in the south of England with no wake, no trimmings and no limousine it cost us around £5000, two years ago. In the Midlands, i.e. Newark or Nottingham for the same funeral you may expect to pay around £2500. Adding a limousine, a small room for the wake, and you would expect to pay closer to the £5000 mark.

Who pays for the funeral?

In the first instance the deceased estate is responsible for the cost. The cost of the funeral, is the first call on the estate (this means that before anyone else can get their inheritance or costs, the funeral director gets they’re money), however probate will still need to be granted to make the payment. Therefore, as probate can take some time the next of kin will be expected to make payment to the funeral director before probate has been granted.

If the deceased has insufficient resources to pay for the funeral from the estate, it is the responsibility of the next of kin to pay for the funeral.

Can you get any help with funeral costs?

The simple answer is, if you have any money probably not. Similarly, if the estate of the deceased has any money no probably not either.

However, if you have no savings, and are claiming income support or similar benefits you may be able to claim some help as an interim payment for the funeral, until the estate’s funds are released, if the estate has sufficient money you will have to pay the council back once probate is granted.

The only situation where the local council would be expected to pay the full costs of the funeral is where the deceased has no next of kin, with sufficient funds, and no assets, or personal belongings that may be sold to cover the costs of the funeral.

It is important to point out that if the next of kin have sufficient funds to cover the cost of the funeral, then the council will not be liable for the funeral, you will have to pay, even if the estate has insufficient funds to reimburse you.

In my mind this means that most people will have to pay for their own funeral, or their next of kin will be expected to. With this in mind many people over 50 start to consider the issue.

Covering the cost of the funeral

There are a number of ways to consider how one pays for your own funeral: You could leave sufficient funds in a savings account. The main disadvantage is that the funds will not be accessible by your family until after probate has been granted. Consider for a moment whether or not, your son or daughter may have as much as £5,000 in a savings account to cover the cost until the estate is released.

Some people consider life insurance (assurance), this can be an inefficient method, as a lump sum is insured not the cost of the funeral, as we discuss later the cost of funerals keeps increasing, therefore the lump sum may not cover the cost in the future.

Notwithstanding that - if you do use this method please take advice on placing the policy in trust, otherwise you may not have alleviated the issue of access to the funds on death.

The other method and probably the best is a pre paid funeral plan.

Funeral plans: how do they work and why should I get one?

Most funeral plans are a way of pre-paying for your funeral, with some you can select various options e.g. you could elect to cover limousine high. Most cover the cost of a cremation, but again you could elect to cover the cost of burial. The basic premiss is that they guarantee to cover the cost of the funeral. This makes a lot of financial sense, the price of a funeral has gone up considerably over the years, between 2004 and 2009, the rate of increase has been higher than inflation or savings account interest at 7.32% per year. (source|: Mintel). Usually the money you have paid is held in trust for you, this puts the value of the plan outside of your estate, so there is no Inheritance tax issues or indeed probate requirements. Therefore, your nearest and dearest can access the funds straightaway.

Funeral Plans: Where Can I Get One?

There a number of suppliers available, some may have restrictions on what funeral director you can use and some may have limited guarantees or options, the point is that it is important to get the plan that best suits your needs.

Traditionally these plans are something one buys without any real advice, most people who buy one go through a local funeral director, and are not aware that you can get independent advice on which funeral plan is best for you.

Dales Independent Financial Advisers can help you chose the right funeral plan for your circumstances. Although the sale of funeral plans are not regulated by the Financial Services Authority, they have issued guidance on funeral plans. We use this guidance, consider your circumstance and requirements, then review the market and find the plan best suited to your situation.

For more advice on Funeral Plans contact Philip Dales Cert PFS Cert CII MP at Dales Independent Financial Advisers: advice@pndales.co.uk. We have offices in both Nottingham and Newark, and would be happy to discuss your situation in more detail.

Call us today to discuss your requirements. Nottingham: 0115 832 0265 or Newark: 01636 87 00 69 or email advice@pndales.co.uk or look at our website www.dalesindependentfinancialadvice.co.uk

The Financial Services Authority do not regulate Funeral Plan advice.

Mortgage Update - New capped rate

2010-04-21T06:42:00.000-07:00

Market leading Capped Rate Mortgage Launched

In these uncertain times, most people don't seem to know which type of the mortgage deal is the best to select.

With Bank of England interest rate so low most people assume that interest rates will, sooner or later increase. However, the issue with a fixed rate product is that if the rate does not increase or only increases a little and then remains static. If you had chosen a fixed rate there is a possibility that you may be paying above what you need to. This has its advantages, the security of knowing what your payment will be may be worth the extra in payments.

With a Bank of England tracker mortgage your mortgage increases or decreases with the ups and downs of the Bank of England interest rate. Therefore, if as outlined above people feel that interest rates will increase, then the payment on this style of mortgage will increase. However, if you don't feel that interest rates are going to increase straight-away or increase only a little and then stall, then this method would appeal. The only problem with this is that what if your wrong and interest rates just go up and up.

So both basic types of Fixed or Tracker rate products have their limitations:

The Third Way!

A Capped Rate:

This is a mixture of both products, it is a tracker mortgage, but it can not go above a specified rate - the cap. So you benefit while interest rates are low, and if they increase a little you are still generally speaking better off than a fixed rate (at the moment) but if the Bank Rate increases above the Cap you are in-effect on a fixed rate, during that period, because if the Bank rate falls you would also fall again. In my view this is the best of both worlds.

Limitations: Caps sometimes have collars, this is when the interest rate charged can not go below a specified interest rate, recently it has become more common for Cap mortgages to have collars, you should always check the Key Facts document for full details on any Collars.

New Deal Launched.

3.99% tracker (Bank of England + 2.49%) until 30.06.12 Capped at 3.99% until 30.06.12

Maximum Loan to Value - 65%

Incentives - One Free Valuation

Remortgage Transfer Service included

Early repayment charges - only during the benefit period (4% to 30/06/12)

This is only one Capped product, it does not suggest that it is the best product for your needs, DALES can review your circumstances and make a recommendation suited to your needs. For Mortgages DALES offer an advice and recommendation service, and recommend products from the Whole of the Market.

For more details of this or other mortgage products or to arrange a free consultation please contact tel: 01636 642 844 or email advice@pndales.co.uk

Your Home is at risk if you fail to keep up payments on any mortgage or loan secured against it. P N Dales Ltd is Authorised and Regulated by the Financial Services Authority 496107.

2010 Budget Update

2010-03-30T04:20:00.000-07:00

Stamp Duty

The finance bill 2010, will introduce a temporary relief from Stamp Duty for first time buyers up to the value of £250,000. To clarify: all parties to the purchase must be first time buyers, and it must be as a main residence. A first time buyer has also been defined as someone who has never purchased a property before anywhere in the world.

The finance bill also introduces a new rate band of stamp duty on properties over £1 Million these will now have to pay 5%.

New Anti-avoidance legislation will also be introduced to target those who currently exploit the partnership rules to artificially reduce the duty payable on land transactions.

First time buyers no stamp duty on purchase of main residence up to a value of £250,000
5% Stamp duty on property over £1 Million

Income tax & National Insurance

Confirmation of the incoming 1% increase in NI from April 2011.

Also confirmed those earning over £150,000 will pay additional 10% from 6^th April 2010, this increase will also apply to many trustees, personal allowances will be restricted for individuals earning over £100,000 from 6^th April 2010.

Increase in higher rate tax to 42.5% for dividends and 50% for other income from 6^th April 2010 for those earning more than £150,000 and certain trusts.
Those earning over £100,000 will lose part or all of there allowance in 2010/2011, a reduction of £1 for every £2 of income over the £100,000.
Lower limit on NI will increase by £570 in April 2011.
NI to increase by 1% from 2011/2012

Corporation Tax

Rate remains 21% from 1^st April 2010 to 31^st March 2011; the increase for companies with chargeable profits below £300,000 has been deferred again!

Inheritance Tax

Frozen at £325,00 (each or £650,00 for married couples) for 2010/2011 and the next 4 years – overriding planned increase to £350,000 as in the budget in 2006.

Pensions

Tax relief for those earning over £150,000 will have their tax relief restricted.
Those earning over £180,000 will be restricted to 20% tax relief
The relief will be based on 1% withdrawn for every £1,000 of gross income above £150,000
Life-time allowance of £1.8 Million and the annual allowance of £255,000 are frozen up to 2015/2016 tax years.

Life Assurance Policies

Deficiency relief.

A complex system whereby if you have in effect overpaid tax on any gain made by a life assurance contract, you are entitled to relief.

New Anti-avoidance provision

Essentially, in certain circumstances you could over claim, this little loophole has been closed.

Investments

Venture Capital Trust Schemes and Enterprise Investment Schemes

The geographical scope of the schemes will be expanded from UK to include shares listed on any EU regulated market. In addition, the minimum holding of “eligible shares” within the VCT will increase from 30% to 70%, however, the definition will be expanded to allow VCT’s to include shares with preferential rights to dividends.

May now comprise shares listed within the EEA
Minimum Eligible shares up to 70%, and definition widened
Qualifying trade relaxed to company must simply have a permanent establishment in UK

ISA’s

Annual Allowance will increase with RPI from 6^th April 2011 (based on RPI for the September before the start of the tax year) the limit will be rounded to the nearest £120.
The Cash allowance will remain at half the value of the Equity ISA limit after indexation.

Stock Picking Funds V's Other Funds

2009-08-26T09:30:00.001-07:00

Stock Picking Funds V’s Other funds

Ok so we hear about how a fund is a stock picking fund, and that this is somehow better than other “non” stock picking funds, whatever they are. So what is a stock picking fund and why is it better? The answer is both straightforward and complex:

A stock-picking fund is where the fund manager is allowed to choose which stocks he wants to hold, usually he has a broad remit and can therefore be relatively free to choose what he wants.

Conversely a “non” stock picking fund is usually tied to some index, the managers job is to out perform the index that he is tied to, however, he will have to hold a large amount of that index, often this can be as much as 75% of the index itself. With this type of fund the manager will be rewarded for having outperformed the index. This is particularly important when you consider the resent market turmoil, if the index is down by say 30% and the mangers fund is only down by 28% - he has still achieved his goal, as he has still outperformed the index.

With a stock picking fund there is no tie to an index, therefore the fund manager is targeted on pure performance, if his fund is down against an index it is of no relevance, if he does not perform he will not receive his bonus.

Most stock picking funds have a theme, and most of them are in fact very similar “value”. There are often stock picking funds within special sectors with specific sector driven themes, such as the Jupiter ecology fund, which searches for value, but within an ethical setting.

I feel the best way to explain this is to give an example. We might see in the news that a company has done something wrong and will be heavily fined (BA for example) and that this will affect its year end profits, their shares fall in value overnight, and then to compound the issue, some other bad news about the company is published, sending the shares even further down. Now due to the resources available to the fund managers, they carry out a great deal of research on the company in the back ground and establish that the company is fundamentally sound, pays a good dividend and will still report good profits, although maybe a little later than planned or often in a couple of years. With this in mind the fund manager buys into the company heavily, while the share price is depressed, feeling confident that some time later these shares will be back in vogue. He keeps them within the portfolio until they increase again in value, and then sells them. This is in a nutshell what all good stock picking funds do.

A real example of this is the M&G recovery fund, some time ago Rolls Royce, were laying off large numbers of their work force, they had been struggling for some time and the news of the lay offs heavily affected their share value. However, Tom Dobell decided that there was something about RR and got involved with them, he established that they had a super new aero engine that should take the company forward, the new engine was suited to the new super airbus the A380. At that time there was one other competitor, but it looked more and more likely that RR would power the aircraft. As is often the case with Tom Dobell, he got his hands dirty and became closely involved with the management team and the restructuring of the company to help maximise the companies potential, during this time RR’s competitor dropped out of the running, which left RR with the only engine capable of powering the A380. A little later the A380 was launched with RR’s new engine, the shares in RR inevitably went up, and M&G recovery made a tidy profit for its investors. (While this synopsis lacks detail, and does not give any real sense of the work involved it gives a general overview of the situation) Even now if you look at the holdings of M&G recovery fund you will still find RR as a holding, Tom Dobell particularly is a long term investor, usually shares or prospects are considered as a 3 or 5 years holding.

This in essence is what stock picking is all about; the general idea is to pick good stocks that are currently under valued. Sometimes the funds are referred to as “value” funds, in the case of M&G they refer to them as Recovery funds, in others they could be special situations or any number of designations, but each one is designed to wheedle out the good quality stocks that are undervalued.

The market as it stands today, is a place full of value with large companies who’s shares are very undervalued, but how on earth would we pick which company is undervalued and which is valued correctly. Take the banks; we all have heard, all to often over the last 12 months how terrible they are, and that they won’t make any money. However, there is value in this market, but which banks are overburdened with toxic debt or massive debts to the government with repayments that will eat into the companies profits and ability to pay dividends for years? Which share prices have been pushed down not because that bank is in trouble, but because the sector is so depressed? If you asked the average man on the street if he would buy banking shares he’d probably laugh at you.

If we look at Barclays, who have had no intervention from the UK government (no matter how often they were mentioned on the News as being in trouble), on March the 6^th their share price was 61.4 pence, now 5 months on their share price is 344.6 pence (17/08/09 at 11:00) this represents an increase of 461%. What this means is that if you had invested £10,000 in Barclays shares on the 6^th March and sold them at 11:00 today you would now have £56,100.

I am not for a moment suggesting that you have £10,000 or that you ever consider direct investment in a single companies’ shares or indeed that you consider investing in Barclays, I am only aiming to highlight that there is value in a market that has fallen so significantly even in the “toxic” area of Banks.

Now is the time to review your portfolio with an Independent Financial Advisor, to maximise your opportunities and ensure that you have the right balance of investments within your portfolio, and make sure that you benefit from what value there is. To arrange an appointment or for more information on these or other types of investment please contact Philip P Dales – ppd@pndales.co.uk or tel: 01636 706171. Or view our website, www.pndales.co.uk .

IMPORTANT NOTE: The views expressed are the authors own and reflect the authors experience and the research undertaken in this area. Your own decisions should take into consideration your attitude to risk, the time span you are investing for and your personal objectives. PNDales Ltd recommends that you should always seek advice from a suitably qualified individual, such as an Independent Financial Adviser (IFA) before making any decision regarding investments'. PNDales Ltd is a firm of Independent Financial Advisors and would be happy to provide tailored advice in this area. All Information Correct as at the 26^th August 2009.

Warning: Investments may fall as well as rise, and past performance is no guarantee of future returns. This article does not represent advice, each persons circumstance are different and the funds mentioned may not be suited to your circumstance. PNDales Ltd will not advise direct investment in shares. PNDales Ltd is authorised and regulated by the Financial Services Authority 496107.

Beware the "free" valuation

2009-08-19T09:15:00.000-07:00

We are all taught to be wary of people offering us a free lunch, and why would this not be the case with a mortgage and the valuation.

Currently there are a number of lenders who are trying to tempt us with a "free" valuation service. However, we should be careful, these free valuations are often only for the lender, in most cases you would not even receive a copy of the report.

What this means is that you have no comeback against the valuer or surveyor who did the work.

Traditionally, when you purchased a house the lender would make you obtain a valuation, you could always buy a basic valuation or upgrade to a full homebuyers report or a structural survey. The surveyor would view the property, check for damp, movement and any problems such as wiring issues etc. You could then decided whether you wanted to continue with the sale, may be you could negotiate with the vender, but at least if you did go ahead you knew or had some sense of surety that you knew what was wrong with the house, even if you picked the basic valuation.

If something was found to be wrong with the house that the valuation should have picked up, you would be able to take the surveyor to task.

Not so with a free valuation: the free valuation is not instructed on your behalf, they are instructed on behalf of the lender and as such you would have no come back at all.

All the lenders do offer an enhanced valuation package, that is those that offer a "free" valuation, and therefore it would be wise to select that option. However, these cost about the same as a standard valuation offered by other non free valuation lenders. What this really shows is that the lender who says "free" valuation, is not really offering a cheeper deal, because when you add in the cost of a real survey there is little difference in cost.

Another cheeky thing these same "free" valuation lenders, will do is add a little to their arrangement fees. They can get away with this if the valuation is free, and still appear cheeper than the non free valuation deals, but when you add back in the cost of a real survey you now notice that they are in fact more expensive.

All this said, we live in a world of cheapest is best, and not many people scratch the surface to look a little deeper, so its unlikely that free valuations will disappear and its even more unlikely that people will not be attracted to them.

Philip Dales

www.pndales.co.uk

Your home may be at risk if you fail to maintain repayments on any debt or mortgage secured against it.
PN Dales is authorized and regulated by the Financial services authority 496107.

For more advice on mortgages or other areas of your financial planing why not have a look at our web site www.pndales.co.uk or email advice@pndales.co.uk

PNDales Ltd

Northgate Business Centre

38 Northgate Newark

Nottingham

Tel: 01636 642 844