Month: June 2018

5 top travel tips to make your holiday easier…

June 25, 2018

Holidays can be expensive, that’s for sure. Getting everything organised for your trip can be quite a challenge, too. So we’ve compiled these simple tips to save you money and allow you to enjoy your time away to the full.

Scanning travel docs
It’s a good idea to scan your travel details, passports and insurance information then email them to yourself. That way, if the worst happens and they get lost or are stolen, it will make it much easier to get your documents replaced by embassies or travel companies if you can produced your scanned copies.

Paying with your card, not currency
Gone are the days when you had to get your currency before you travelled. So why not avoid the stress of queuing at the bureau de change and make the decision to pay mainly by card while abroad. It will take one thing off your To Do list and paying with a card is usually cheaper than changing money at the airport anyway. You can always use the ATMs abroad for some extra cash and paying by card is safer and more convenient.

Avoid ‘squanderlust’ at the airport
The shops and cafes in departure lounges know they’ve got a captive audience but do try and resist the temptation to go on a spending frenzy as you while away the time before your flight. Research shows that a third of Britons admit to blowing any leftover cash at the airport once a holiday ends. So take time to consider whether you really need a pair of overpriced gold flip flops. Is that bottle of bizarrely coloured liqueur truly an amazing offer or is it going to languish at the back of your drinks cabinet once you get home?

Book in advance
Pre-book as much as you can before you go to save time and money. Not only can you get excited at planning all your excursions in advance, it is much cheaper and you can enjoy a sense of satisfaction as you bypass all the queues. Hiring a car is usually cheaper if you do it in advance, so take advantage of all the comparison websites online to find the best deal.

Pay it forward
You’ll have seen the charity collections at the airports for unwanted currency. With 86% of Britons admitting to having leftover change, it’s a nice gesture to donate any change that’s just going to gather dust at home, before leaving the country. Figures show people have an average £36 of leftover currency. Of course, you could save it for your next trip, provided of course you’ll remember where you put it, but if you’ve enjoyed your well-earned break, why not pay it forward?

Over 60s are jumping off the property ladder. Here’s why…

June 25, 2018

In 2007, there were 254,000 older people living in private rented accomodation. According to research by the Centre for Ageing Better, over the last decade that figure has skyrocketed to 414,000. If things continue the way they’re going, they estimate that over a third of those over 60 will be privately renting by 2040.

So why the shift? Renting comes with some clear benefits. Having to pay stamp duty becomes a thing of the past, as does worrying about managing property maintenance. A certain sense of freedom comes with renting too, particularly in terms of location. It’s a great opportunity to finally live on the coastline or in the city centre that you’ve always wanted to, but have not been able to afford to.

For example, one couple had previously owned a retirement flat in Torquay which they subsequently sold for £55,000. They dreamed of moving to Bournemouth, where a modest one bed apartment would have set them back closer to £150,000 and so was out of their reach. They found a home to let on an assured tenancy, allowing them to remain in the property for life for a fee of £775 a month including service charges. Selling to rent has allowed them to liquidate their biggest asset, and free up their capital to spend on travel.

Renting needn’t be forever, and for some people it’s a great opportunity to stop and think about your next move. It can give you time to really look at the options out there if you intend to get back on the housing ladder. Your requirements will change as you grow older and downsizing can be a great idea for some. Before you find the perfect property which will suit your needs going forward, renting gives you the chance to release some capital and decide what to do with it.

It’s worth bearing in mind, though, that by selling up and moving into private rented accommodation, your estate could receive a higher IHT bill. The inheritance tax exemption introduced in 2017 allows parents and grandparents an additional IHT allowance when their children or grandchildren inherit their main home, and so selling your home could remove your eligibility for the exemption.

If you have any questions around this topic, please feel free to get in touch with us directly.

Can I use equity release to pay for care?

June 25, 2018

It’s one of the scary things about growing old, isn’t it? We’re all living longer, thanks to medical science but does that mean more of us are going to end up in a care home, struggling to find the means to pay for it?

A year in a care home can cost more than £50,000. This means some families are accumulating huge bills. If you have assets of more than £23,250 (slightly more in Scotland and Wales), the law states that you must fund all your care costs yourself, without any help from the Local Authority. This figure includes property, so if you have your own home, you won’t be eligible for any support.

As a result, many families are finding themselves facing a significant gap when it comes to funding care for their loved ones. This added financial burden comes at what can often be a sad and stressful time anyway.

One way some families are funding the cost of care is through the value of their home; equity release or a lifetime mortgage, as it is sometimes known. This allows anyone over 55 to borrow against the value of their home. You can draw money to about 50% of your property’s value and there are no monthly repayments. The interest rolls up at a compound rate until the person borrowing the amount dies. To protect you, the total debt can never exceed the value of your home and will be cleared from the eventual sale of the property.

It’s worth noting that interest rates tend to be higher than standard mortgages but there are no affordability checks or repayment plans. You can decide whether you take the money as a lump sum or in stages.

There are different ways of using equity release. Most people would prefer to stay in their own home for as long as possible rather than move into a home, so one option can be to use the money to make home improvements and adapt the property to their needs as they grow older. Installing a wet room or a moving a bathroom downstairs, for example, can often be practical solutions.

It is more difficult to use equity release to fund care home costs. In fact, according to a Daily Telegraph survey in 2017, only 1% of respondents gave that as a reason, compared with debt repayment, inheritance gifts, home improvements or to boost disposable income. The complexity stems from the fact that the repayment of the loan is often triggered by the very act of someone moving into long-term care. If one half of a couple, however, needed to go into a care home, it does mean that the property would not need to be sold to repay the debt until their partner died or moved into the home with them.

It’s obviously difficult to predict the length of someone’s stay in a care home so equity release may not always be a straightforward decision but, in some cases, it can be a useful option for quick, upfront funding.