Savings Archives - Oakhill Independent Financial Services Limited

Transfers of wealth – who gets what

Data from the Office for National Statistics⁵ show that various patterns are emerging in how wealth is transferred down the generations.
Unsurprisingly, gifts and loans are more commonly made to those aged 25–34, with 11% in this age bracket receiving more than £500 during the previous two years, with the average across all age groups being £2,000. This illustrates that parents are stepping in to help their offspring cope with times of major expense, like buying a house or starting a family.

Inheritances come later in life

The average inheritance across all age ranges during the previous two years was £11,000, with those aged 55 to 64 most likely to receive larger inheritances, receiving on average £33,000. Those aged 65 and over inherited on average £20,000. This money was put into savings or investments by around 49% of recipients.

This research serves to highlight that those who rely on receiving an inheritance instead of putting adequate pension provision in place might find they’ve reached retirement before they inherit. With gifts often given earlier in life, inheritances may be smaller in the years to come.

⁵ONS, Oct 2018

22 July 2019/by motive

News, Savings

Celebrating 20 years of the ISA

The Individual Savings Account (ISA) was launched on 6th April 1999 and it hasn’t looked back. Today it’s estimated that 42% of adults hold one, which is hardly surprising considering how simple and tax-efficient they are.

When the ISA was launched, the annual allowance was £7,000 and it has risen steadily over the years. In this tax year, you can contribute up to £20,000 to an ISA or ISAs. Those who have made use of their stocks and shares annual allowances over the years could by now have put just over £206,000 into their ISA accounts.

A range of tax-free options

At the beginning there were a limited amount of accounts on offer, including the cash ISA and the stocks and shares ISA. Since then, the range has increased to include the Junior ISA for children, the Help to Buy ISA for first-time buyers, and the Lifetime ISA for those looking to save for a deposit on a property or for retirement.

If you’re planning to save this tax year, it’s a good idea to put plans in place as early as possible. The longer your money is saved or invested, the more time it has to produce tax-efficient returns.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

15 July 2018/by motive

Mortgages, News, Savings

Top tips for saving for a deposit

With the average property in the UK now costing over £200,000, saving a big enough deposit to get a good mortgage deal for your first home can seem like an impossible dream. Here are some tips that can help boost your savings.

TAKE A LONG HARD LOOK AT WHAT YOU SPEND

In order to get a mortgage, you will need to show that your finances are in good order and that you can comfortably afford the repayments. Good budgeting skills are essential. Serious savers will tell you that cutting down on trips to the coffee shop and making yourself a packed lunch are all good ways of cutting your living expenses.

KEEP CREDIT CARDS AND LOANS UNDER CONTROL

Make sure you don’t miss payments and don’t become over-reliant on your card for day-to-day living expenses. Check out the various balance transfer deals available and where appropriate move your card balance to one with a lower interest charge. With interest rates low, you might be able to get a better rate on any loans you have. Consider switching your bank account too, as many banks offer valuable cash incentives to new customers.

TAKE ADVANTAGE OF THE GOVERNMENT SAVINGS SCHEMES ON OFFER

From April 2017 savers can take advantage of the government’s latest addition to the Individual Savings Account range, the Lifetime ISA (LISA), designed to permit individuals under the age of 40 to save for a first home or for their retirement. The main attraction of a LISA is the generous bonus of 25% on offer for savers, meaning that for every £4 they save, the government will add £1.

To qualify to open a LISA, you will need to be aged between 18 and 40 in April 2017, and any savings you put in before your 50th birthday will receive the 25% bonus from the government at the end of the tax year. There is no maximum monthly contribution; savings can be as little or as much as you like up to the annual limit of £4,000. Savers need to be aware of the risks associated with a LISA, early withdrawal charges, restrictions and accessibility.

TALK TO MUM AND DAD

More and more first-time buyers are borrowing or receiving gifts of cash from their parents or grandparents. In many cases, the older generation are happy to pass on cash during their lifetime, so share your plans with them as early as possible.

MOVE BACK IN WITH MUM AND DAD

Lots of young people move back in with their parents to save on rent and help their savings grow faster.

EXPLORE WAYS OF EARNING EXTRA CASH

Sell stuff you don’t need. Be on the lookout for evening or weekend jobs that could boost your savings; from bar work to dog walking – every little helps.

GET GOOD ADVICE AS EARLY AS POSSIBLE

Talking to your mortgage adviser can help you get the right savings plan in place, and when the time comes, get the mortgage deal that’s right for you.

As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayment.

The information within the article is for information purposes only and does not constitute individual advice. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.

3 January 2017/by motive