Don't Panic! The Black Monday storm is clearing

by Paul Northmore, Managing Director

This week has been a rollercoaster of a ride for the markets with Monday 24th August being named 'Black Monday'.

The tumble in Chinese equities as a result of a slowdown in the economy has taken its toll on global equity and bond markets with the Chinese Shanghai Composite Index falling over 8%.

This was followed by European and then US market falls, the FTSE 100 finished 4.7% lower at 5,898.87 and the S&P down 3.9%.

The slowdown in China and the devaluation of its currency have spooked markets. We have seen a significant fall in commodity prices on the back of this as well as significant falls in stocks with exposure to China. In addition we are facing further falls in the oil price which is having an adverse effect on oil and gas companies. Some of this we have seen first hand at the fuel pumps.

Eight tips to help you get a mortgage

by Lisa Burton, Independent Financial Adviser

A year on from the Mortgage Market Review and the landscape for mortgages has evidently changed.

Our suggestions for mortgage and remortgage applicants would be as follows:


With lenders checking applications even more thoroughly, it saves time if you tell us about all of your financial commitments initially rather than the lenders finding out and returning with queries.

Mortgage interest rate cycle - will the cost of borrowing ever be this low again?

Independent Financial Adviser Patrick Goddard gives his view on the current market.

Economic fundamentals (i.e. the strength of the general economy and the jobs market along with the Help To Buy' scheme and the stamp duty reforms) all combine to create an environment that encourages demand for housing and the confidence to borrow. 
There is continuing demand and limited supply - we have not been building enough houses for many years now, and this is most likely to have an upward effect on house prices. 

As people clamour to get in the market or move up-market, the increase in prices is driven yet further, as is the demand for mortgage borrowing.

This overview is evidenced by the latest Council of Mortgage Lenders housing commentary which reports gross mortgage lending in March at 21% higher than in February.  As wages inflation continues to outstrip price inflation and confidence is further encouraged by continuing low interest rates, so this upward trend is expected to continue.

So what does all this mean for individuals?

Why pensions are like ice cream

Mike LeGassick, Independent Financial Adviser with Manning and Company, explains why the blended approach to retirement income planning could be the best choice.

If you were born around 1960, you will soon be facing a pivotal decision: how will you shape your life over the next 30 years?

First of all think back 30 years, to 1985 – when music came on vinyl or cassette, and the internet hadn’t yet arrived.  Can you think ahead to the year 2045 and imagine what life might be like?  Honestly, can any of us?!

Yet thanks to the new pension freedoms which come into effect in April, that’s exactly what anyone aged 55 or over will have to do.  As never before, your future is in your hands.

Budget 2015: good news for savers, first-time buyers and pensioners

by Patrick Goddard, Independent Financial Adviser

By and large, it was the pre-election Budget that everyone expected; and it provided at least something for most people to smile about. 

Overall there was plenty of good news for our clients at every stage of their financial journey – along with some announcements that mean certain clients need to plan or take action soon.

Pensioners with annuities

For those who have already retired, the biggest headline was annuities.  From 2016 it is proposed that pensioners will be able to trade in their existing annuities for cash, if their provider permits it.  The cash can be taken as a taxable lump sum (with the 55% tax charge abolished and tax applied at the marginal rate); or it can be used to provide a flexible annuity; or invested to provide a flexible retirement income.

New pension rules: don’t forget about tax

by Paul Northmore, Managing Director

The new pension rules announced last year come into effect on 6th April 2015 – “Freedom Day”.  

From that date, if you are 55 or over you can withdraw your entire ‘defined contribution’ pension pot as a cash lump sum if you wish.  (‘Defined contribution’ means how much you receive depends on what you’ve paid in.) 

Many are tempted by the new freedom.  A recent survey by The Pension Advisory Service and TD Direct Investing indicated that 24% were planning to take at least half of their pension pot as cash. 

But there are some important tax considerations.

The new tax rules for pensions

75% of each lump sum you withdraw is subject to tax – and your pension pot withdrawals are classed as ‘income’ and taxed by the same rules.  This means:

Should you cash-in your final salary pension?

By Patrick Goddard, Independent Financial Adviser

If you have a final salary pension scheme, many people may be rather envious!  These schemes, which usually pay a proportion of your salary at the time you retire, are now few and far between.  

Final salary schemes are a type of pension known as ‘defined benefit’ – no matter how the markets perform, you know how much you’re going to get when you retire.  

But most schemes now are ‘defined contribution’ schemes – the only certainty is how much gets paid into the scheme, not what your payout may be.

The certainty of a final salary scheme is what’s so appealing.  So who would give that up?

Well, with the pension reforms which come into effect in April 2015, everyone has considerably more freedom in how to use their pension fund – whether it’s a defined benefit or defined contribution scheme.

I am fed up with my job – can I retire?

by Peter Harrison FPFS, Independent Financial Adviser.

This is a question I get asked a lot: “I’ve been at work since I left college – now I want to live a little! Can I afford to?”

The first step in answering this question is to understand what capital and income you may need if you stop full time work – bearing in mind that you may need cash for a long holiday, buy a camper-van and travel the world, carry out some home improvements, help out the children a little.

After that, you need to remember that your resources will now have to last you for the rest of your life – and inflation will erode their value over time.

How Julie saved £144,000

by Mike LeGassick, Independent Financial Adviser with Manning and Company

Julie* from Plymouth worked hard as a social care worker.  She also planned for the future, putting money away faithfully into her Final Salary pension scheme.  She could expect a comfortable retirement.

But there was a problem.  Julie had a health scare, which prompted her to think: what if retirement never comes...? 

Six equity release myths exploded

By Mike LeGassick, Independent Financial Adviser

If you’re in need of a cash lump sum, you may consider joining the thousands of people who have taken out an Equity Release plan, enabling them to borrow money against the value of their home.  Yet ‘urban myths’ about Equity Release still abound; so it's time to set the record straight.   

Myth 1:  You won’t own your home any more.

There are two ways to release the cash tied in up your home.  The first is ‘home reversion’ – and in that instance then yes, your home is sold to the home reversion company in exchange for cash and the right to remain living in the property. 

But the far more usual approach to equity release is a ‘lifetime mortgage’, covered by The Equity Release Council guarantees.  You borrow money against the value of your home, but the property remains yours.  The equity release company is granted a legal charge over your title deeds to ensure that any remaining debt is repaid to them when the property is sold.  But importantly the property is still yours and you can live in it for the rest of your life if you want to.

The simple question worth £176,000.

By Mike LeGassick, Independent Financial Adviser, Manning and Company

When it comes to critical illness, we so often think, “It’ll never happen to me”.  But it did happen to two of my clients.  With their consent, let me tell you their stories.

Matt’s story

During a meeting with some clients in January, I casually asked after their son Matt, who was also a client of mine.  It was an innocent question; but when their response was that he was “bearing up” I was somewhat confused.  

It turned out that Matt had discovered a lump just a month before.  He had it investigated, and it resulted in the immediate removal of a testicle as it was an invasive seminoma.  

What’s happened since the Mortgage Market Review?

By Paul Northmore, Managing Director

At the end of April the mortgage landscape changed dramatically due to the Mortgage Market Review (MMR).

As our previous blog post explained, mortgage lenders now have to scrutinise mortgage applications much more closely to check the borrower can afford the repayments, both now and in the future should mortgage interest rates rise.

So from our perspective as advisers, what changes have we seen in the last few weeks?  And what suggestions can we offer to mortgage (and remortgage) applicants?

Should you invest in bricks and mortar?

By Peter Harrison, Chartered Financial Planner, Manning and Company

Those with available cash may wonder whether to buy an investment property.

Property is often thought of as a reliable long-term investment – and indeed predictions for the next few years look good.  However, the Mortgage Market Review (which came into effect a month ago) will mean borrowers purchasing a property solely for their own use will be scrutinised to ensure they can afford the repayments.

Budget 2014

In honour of the new twelve-sided pound coin announced on Budget Day, here are our twelve top headlines from the Budget 2014.

First, for individuals:

1.  ISAs are becoming simpler, and the annual tax-free limit is rising to £15,000 in July.  Savers will be allowed to save the maximum amount in cash, instead of splitting their money between cash and stocks and shares – sure to be a popular move. If you don’t already have an ISA, this is the perfect opportunity.  Talk to us for advice.

2.  Junior ISAs will see an increase in the annual tax-free limit to £4,000 per year. A good way to get the younger ones in your family engaged with saving!

3.  A new pensioner bond from National Savings & Investments will allow those aged 65 and over to save up to £10,000 at better interest rates than currently available on the market – a figure of 4.0% for a three-year bond has been indicated.  If you’re eligible and have the wherewithal to save, take advantage of this.

Just 16 days to the breadline for families in the South West

By Patrick Goddard, Financial Adviser, Manning and Company Independent Financial Advisers

The money could run out in just 16 days for families in the South West and 26 days for the UK as a whole.

According to a recent report, if the main breadwinner was taken seriously ill or suddenly died, families in the South West had on average just 16 days before all their savings ran out and they found themselves on the breadline.

According to the report, the average household savings in the UK was just £1,010. But if you thought that was low, 33% of UK households had no savings at all - meaning they could be on the breadline tomorrow.

Optimistically, people had believed they could survive 3 times longer (48 days on average) compared to the reality of 16 days.

Without any other means of income, what about relying on friends and family? The average monthly amount they could spare was £107; however 66% of households said they would not expect to receive any financial support from friends and families.

This year it doesn’t get better; with welfare reforms, austerity measures and cuts - how long could your family survive financially if the worse was to happen?

If this makes you feel vulnerable, then arrange a free meeting with a Manning and Company financial adviser who will review your finances and discuss what protection measures you could put in place.

Research - Legal & General Deadline to the Breadline Report 2014

Get closer to our primate friends with our exclusive discount!

By Mike LeGassick, Independent Financial Adviser, Manning and Company

Last year Manning and Company were delighted to become a corporate sponsor of animal welfare charity, ‘Wild Futures’.  This included adopting Gizzie the capuchin monkey who lives at the charity’s flagship project - The Monkey Sanctuary.

As a special offer for Manning and Company clients, we’ve arranged an exclusive 20% discount off The Monkey Sanctuary entrance fees when tickets are booked online.

Autumn Statement 2013

by Paul Northmore, Managing Director

While George Osborne tells us “The plan is working,” the fact facing many of us is that we ourselves will be working longer than expected before we receive a state pension.

The headline implications of this year’s Autumn Statement are that those now in their 40s will need to work until 68 to get the state pension, and those currently in their 30s will have to wait until age 69. And who knows if the pension age will rise yet further in years to come?

It’s an inevitable outcome for an aging population the country can’t afford to fund.  And it’s compounded by the fact that those starting work today typically do so at about 21, six years later than the typical age when the pension model was first established – so the system is losing out on a lot of NI contributions.

What’s worth more: you or your car?

by Mike LeGassick, Independent Financial Adviser, Manning and Company

Benjamin Franklin said, “But in this world nothing can be said to be certain, except death and taxes.”

So how much life insurance would you take out to protect your family if you knew you were going to die in 6 months’ time? Would you invest in some critical illness cover if you knew you were going to have a heart attack, stroke or other critical illness, and survive it? Chances are you would get as much as you could and as quickly as you could.

So why is it then that only a fraction of the UK has any type of life or critical illness cover?

You may have a will… but is it legally valid?

In 1999 Alfred Rawlings and his wife Maureen made their wills and signed them in front of their solicitor.  But there was one small problem… they signed each others’ wills by mistake. 

Maureen passed away in 2003; but it wasn’t until Alfred died three years later that the problem came to light.  This simple clerical error had made both wills invalid.  Unfortunately, the wills were contentious, and a very public legal battle ensued!

But although this particular case hit the national headlines, this isn’t an isolated incident.  Some estimates suggest that 40% of wills are legally invalid, often due to errors in how the will was signed or witnessed.

If you’ve taken care over your financial matters in life, it’s a sobering thought that an invalid will could put all your careful financial planning in jeopardy.

So, we’ve arranged for two highly-respected Plymouth law firms to offer Manning and Company clients a will review, absolutely free of charge.

Annunities: the gamble of your life

By Mike LeGassick, Independent Financial Adviser, Manning and Company

When planning your retirement, you may worry that you will outlive your income.  It’s understandable, as we’re all generally living longer and enjoying better health. 

For some, an annuity is the answer.  An annuity is an insurance product, bought on retirement with the money saved in your pension pot.  It pays you a regular sum for as long as you live.

But annunities come with a very significant risk.  You are gambling that you will live long enough to receive back as much as you paid in.