01 Jul 2022
Organise your finances to benefit before interest rates change again!
Contact us today if you want to save money.
I’ve opened with this line as it is well known many of us skim read and if there is one message I need to convey, it is that by organising your finances now, you will benefit before interest rates change again.
Although the Bank England meet once a month to discuss what to do about inflation which inevitably means increasing the base rate, lenders are needing to change their rates almost on a daily basis. In my twenty years of advising, I haven’t seen interest rates change so rapidly.
There are two things happening here, one, a reaction to base rate increases and two, lenders trying to control the high level of demand. Speaking to lenders, we are told it takes approximately ten days from making a decision to withdraw and release new rates to full implementation. By the time this process has transpired, the rest of the market has moved their rates. Having the lowest rates then leaves them with a surge of applications and the only way to control this is to move their rate again to control volumes.
The best deal on the market is still cheap finance. Although rates have been increasing, we are simply back to where we were pre-pandemic and as a society we will re-acclimatise to the interest rate environment as we always do. Of course, coupled with the cost of living crisis, mortgage rate increases seem to be the icing on the cake especially for first time buyers.
So, how do I ensure I am not overpaying on my mortgage?
- Seek advice as soon as possible as rates are constantly changing. Some lenders allow us to hold rates for up to 30 days
- If you are a home mover, we will advise on whether we port your existing mortgage (depending on the rate) rather than secure a new mortgage
- If it is almost time for you to remortgage, we can secure a mortgage offer with a six-month expiry, so even if your fixed rate hasn’t ended you can secure your mortgage and complete when the time is right at todays interest rates.
- Avoid doing nothing
This month, we are looking at how we help you protect yourself and your family against the financial impact of a life event.
When did you last review your life cover?
Life changes with marriage, separation/divorce, children, job changes etc. Each change has an impact on the level of income or life cover protection you and your family may need.
When arranging mortgages for our clients, we often find life insurance policies (and Wills) will not deliver the outcome expected.
By regularly reviewing your policies you can ensure that your family receives the lump sum or regular payment you decide giving you peace of mind. We will also ensure your policies are written in Trust which means the funds go directly to your chosen beneficiaries and not shared with HMRC.
Our advisors can offer you a free review of your policies, email firstname.lastname@example.org to book your review.
Own your own business?
Put Life cover on expenses.
As a Limited Company Director, you have the choice of paying your life cover via your own bank account and hold the policy in your name, or for your company to own the policy and pay via your business account.
A policy that is paid for by your business is called ‘Relevant Life Cover’. It is designed to deliver a cost-efficient way of offering life cover to you or your employees. It’s tax efficient and, typically premiums can be treated as an allowable business expense by HMRC. With Corporation tax relief available, no additional income tax or National Insurance to pay, it’s good business for both you and your employees.
Who can qualify?
The person covered must be an employee of a UK business, which can include salaried company directors. Relevant Life Plans are not currently available for sole traders, equity partners of a partnership or members of a Limited Liability Partnership.
You provide us with the details of the Directors or Employees you would like covered.
Your company is the policyholder and therefore responsible for the payments. We write the policy in Trust for the benefit of you/the employee. Should either you or the employee die, a claim is made and settled to the Trustees
How much cover can I have?
With many policies, and depending on your age, an amount equal to 15 to 25 times your total remuneration package can be taken as life cover.
With the cost of living increasing, you can take a vital bill away from your budget or that of your employees which will be hugely appreciated.
If you would like further information on Relevant Life plans OR to be receive a quote, please email email@example.com.
Wellbeing benefits of income protection
Income protection insurance can be a cost-effective way of protecting yourself financially if you are unable to work due to illness or injury.
What many people don’t realise is that taking out an income protection policy can have benefits beyond the financial. Many policies now offer ‘extras’ to also help support policyholders’ health and wellbeing during a difficult time in their life.
The evolving nature of protection
Income protection is designed to pay a percentage of your regular income to help support you financially if you are unable to work. But many modern policies take a more holistic approach to your wellbeing. They may offer, for example, access to mental health support, physical therapy or dietary advice to aid your recovery.
Support at a difficult time
When you’re unable to work due to illness or injury, the last thing you want to be worrying about is your next mortgage payment or how you’ll afford your children’s school uniforms. For an affordable premium, income protection means that all you’ll need to think about is getting back to full strength.
Talk to us about your needs
We can help you find an income protection policy that suits your needs. Just get in touch.
As with all insurance policies, conditions and exclusions will apply