May 2023

Newsletter

Help is at hand for energy bills

No one has been immune to the unwelcome increases in the cost of energy over the past year – with gas price increases of 129.4% and electricity going up by 66.7%, according to the Office of National Statistics1.

However, there may be some light on the horizon, with forecasts that energy bills are expected to fall by nearly £450 from July as the Government’s Energy Price Guarantee takes effect2.

Despite this, the high energy prices can cause significant challenges for the average household, so we have gathered together some advice and guidance which may provide further assistance to help save money on energy bill:

  1. Check if you are eligible for any government grants or schemes to help you pay for your energy bills
https://www.smartenergygb.org/about-smart-meters/advice-for-those-worried-about-energy-bills/grants-and-schemes#grantsNschemes
  1. Take regular meter readings, or get a smart meter
https://www.smartenergygb.org/about-smart-meters/advice-for-those-worried-about-energy-bills#regularmeterreadings
  1. Contact your energy supplier to see how they can help
https://www.smartenergygb.org/about-smart-meters/advice-for-those-worried-about-energy-bills#contactenergysupplier
  1. Make your home more energy efficient
https://www.smartenergygb.org/about-smart-meters/advice-for-those-worried-about-energy-bills#homemoreefficient
  1. Talk to someone for advice
https://www.smartenergygb.org/about-smart-meters/advice-for-those-worried-about-energy-bills#talktosomeone

As ever, facing the issue as soon as possible rather than ignoring the problem has to be the best course of action. As demonstrated, there are resources available to everyone but there is no substitute for immediate action.

* Source: Office for National Statistics

Sources

  1. Office of National Statistics (2023) Cost of living insights: Energy. Available at: https://www.ons.gov.uk/economy/inflationandpriceindices/articles/costoflivinginsights/energy (Accessed 22nd May 2023)

All the information in this article is correct as of the publish date 25th May 2023. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

Get Remortgage Ready

The late-Spring period is a busy time for remortgages this year – according to data from USwitch, over 371,000 of us are due to be coming up for a remortgage on our homes between April and June 2023, so chances that this may be you right now, or it’s coming up soon.

We’re here to help you for every step of the way, and we’ve put together a brief guide on how you can get yourself ‘remortgage ready’, so that together, we can make this as simple and straightforward as possible for you.

Why might I need a remortgage?

One of the most common reasons for a remortgage is that the term granted on an initial mortgage deal is coming to an end. Most mortgages are granted on an initial two-year or five-year period, and once this expires, many lenders will put you onto their default Standard Variable Rate (SVR) which can mean that you end up paying more than you need to, as the interest rate is sometimes higher than can be sought elsewhere.

For this reason, we’d advise that you get in touch with us, firstly, if you are in any doubt as to when your initial mortgage term expires, and secondly, for us to help you find a rate that may be more suitable for your own individual circumstances.

This can involve either a full remortgage, finding a new product with a new lender, or we can help arrange a product transfer, which is where we can put you onto the most suitable mortgage product with your existing lender. Either way, we’d recommend that you come to us for bespoke, professional advice on the most appropriate deal that fits your exact circumstances, especially as there’s so much at stake.

How to get Remortgage Ready

There are a range of easy steps that you can take which will help make the remortgage process as smooth as possible:

  • Plan ahead – allow some time for a remortgage to take place, ideally contact us around 3 months ahead of your existing deal expiring to give a good amount of time to find the most suitable deal for your circumstances, and we’ll keep in touch at every stage of the process to keep you informed on what you need to do next.
  • Plan your finances – just as for applying for your first mortgage, it pays to make sure your finances are truly in order. Check your credit score, don’t apply for any new credit, avoid any large purchases, avoid payday loans or overdrafts at all costs to boost your chances of quick acceptance for a remortgage. It also helps to bear in mind an estimate of your existing property’s value – have a look around at property websites to get a good idea of recent market prices.
  • Get your documents in order – just as for your first mortgage, documents will be required to prove your identity, current address and proof of income – save time by gathering your documents together upfront. This can include your last 3 month’s bank statements and payslips, proof of any bonuses, your latest P60 tax form, official ID (such as Passport) and proof of your address, such as utility bills with your name and address visible.
  • If you’re self-employed – you’ll need to show additional proof of income with three years history. You can aid your application by showing future workload and incoming revenue stream.

This should give you a good headstart on having the key documents and info you need ahead of a remortgage. We’re here to support you every step of the way, so if there’s any queries you have, just ask us and we’ll be happy to help.

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

There may be a fee for mortgage advice. The Financial Conduct Authority does not regulate some forms of buy to lets.

Sources

  1. USwitch (2023) UK Mortgage Statistics 2023. Available at: https://www.uswitch.com/mortgages/remortgaging/remortgage-statistics/ (Accessed 23rd May 2023)

All the information in this article is correct as of the publish date 25th May 2023. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

Pensions – when will you be able to get yours?

Pensions will rise by 10% this year1 but the cost of maintaining the state pension is becoming unsustainable for the UK Treasury. For those of us who have maintained our belief in the automatic right to a pension when we reach retirement age, we may have to dial back our expectations.

The Government has recently published a report on the sustainability of the state pension2 in the future and it does not make optimistic reading. The major finding simply states that in its current form, the state pension is too costly. Either the state pension age will have to rise rapidly, which is likely to hit the under 40s especially hard, or the ‘triple lock’ – the automatic mechanism that ensures pensions increase in line with whichever is higher — prices, earnings or 2.5 per cent, will need to be axed.

No action is expected on this until after the next General Election in 2024, and this will be a controversial topic for the Government of the time, especially as the decision will affect so many, for years to come. The current minimum age of retirement in the UK is 66 years, depending on your current age3. It’s likely that the younger you are, the longer past 66 you will be entitled to receive the state pension, but you can check your present status on the Government website at https://www.gov.uk/state-pension-age

The time you can receive your pension will rise to 67 between 2026 and 2028. In fact, between 2010 and 2028 women will actually have seen the state pension age increase by seven years4.

If you were born after 5th March 1961 and are 62 or younger today, you will not be entitled to a payout until you are at least 67. The next increase to age 68 is not planned until 2046 but with the growing recognition that the state pension is becoming unaffordable, it is rumoured that the Government is considering bringing that forward. As it stands, someone currently aged 45 or younger won’t get their state pension until aged 684.

The Government aims to limit the rise in state pension costs between now and 2070 to 6 per cent of GDP (Gross Domestic Product). In order to achieve that either the state pension age will have to go up or the ‘triple lock’ will have to be scrapped and millions of pensioners would see their standard of living fall as incomes fail to keep pace with the cost of living4.

Sources

  1. The Time Money Mentor (2023) State pension increases 2023. Available at: https://www.thetimes.co.uk/money-mentor/article/state-pension-increase/ (Accessed 22nd May 2023)
  2. HM Government Department for Work & Pensions (2023) State Pension Age Review 2023. Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1147389/state-pension-age-review-2023.pdf (Accessed 22nd May 2023)
  3. Gov.UK (2023) Check your State Pension age. Available at: https://www.gov.uk/state-pension-age (Accessed 22nd May 2023)
  4. Beard, J. (2023) When will you get your state pension?. Available at https://www.thisismoney.co.uk/money/pensions/article-11961943/So-state-pensions.html (Accessed 22nd May 2023)

All the information in this article is correct as of the publish date 25th May 2023. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

Inheritance Tax – is your estate going to be liable?

Missing just a couple of payments can have pretty serious consequences, but what exactly happens?

A shortfall equivalent to two or more months’ repayments means you are officially in arrears.1

A failure to pay your mortgage will trigger a report by your lender to the major credit bureau and they could lower your credit score, which will make it more challenging to seek credit elsewhere. After your grace period (this is usually one week to fifteen days after the payment due date) a late fee will be added on to the payment you failed to make.

Your home may be repossessed if you do not keep up repayments on your mortgage.

What to do, and what not to do

The most important thing is not to stick your head in the sand. Talk to your lender as soon as you think you may have some difficulties. If you fall behind your mortgage payments by 90 days, this is considered as defaulting on the loan, and your lender can start proceedings to repossess the property, however there are avenues of assistance that can prevent you reaching this stage.

By speaking to your lender, you may be able to make a plan for the payments you owe, or even to create a forbearance agreement with your lender, to allow a short-term solution to catch up on your payments.

We recommend that as well as speaking to your lender if you are struggling, please do not hesitate to reach out to us and let us know if you have any challenges, we can take a look at your specific circumstances.

Your lender’s obligations

Within 15 working days of falling into arrears, your lender must:

  • Tell you how much your arrears add up to
  • List the missed payments
  • Explain how much is outstanding on the mortgage
  • Outline any charges

Your lender must then treat you fairly by considering any requests about changing how you pay, perhaps with lower repayments for a short period.

Any arrangement you come to, the FCA points out, will be reflected on your credit file – affecting your ability to borrow money in the future – as will any missed payments.1

Your lender might also suggest or allow you to extend the term of the mortgage or let you pay just the interest for a certain period of time.

If in doubt, please do get in touch with us as well as your lender if you think you may be struggling, help is at hand.

For additional assistance, you can also visit the Citizens Advice website which contains further detail about what to do – https://www.citizensadvice.org.uk/debt-and-money/mortgage-problems-debt-and-money/

Sources

  1. BBC News (2023) Mortgages: What happens if I miss a payment? Available at https://www.bbc.co.uk/news/business-63486782 [Accessed 25 Apr 2023]

All the information in this article is correct as of the publish date 27th April 2023. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

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