Archive for the ‘Personal Accounting’ Category

Bigger houses for parents: the solution to young people’s financial woes?

Wednesday, May 7th, 2014

Parents of young adults are increasingly opting to buy larger properties in order to accommodate their children, who are finding themselves unable to purchase or rent their own home.

Over a fifth of parents who moved home in the last six months reportedly decided to acquire a larger house, a reason stated being that their adult children struggling to make ends meet would then have the option of staying with them.

Many of these parents have resigned themselves to the fact that their children may be staying with them, at least periodically, up until their late twenties.

A number of factors are said to contribute to young people’s widespread inability to become fully independent of their parents. These include:

  • house prices, whose rise outstrips wage growth in many parts of the country, especially the south
  • large amounts of student debt
  • fewer opportunities, and more stringent requirements, for young people attempting to secure employment.

The research comes from the Royal Mail, who questioned users of its mail forwarding service about their new homes. Around 13,000 homeowners were quizzed between October last year and April this year.

21 per cent of respondents stated that their children’s problems with full independence – their lack of money, or of simply being unable to find a property of their own – was a factor in their decision to search for a larger abode.

Andrea Martin, Royal Mail’s managing director of data services, said: ‘It is interesting to see so many people buying larger properties in the expectation that their children will be living with them longer into adulthood.

‘Alongside this, patience is proving a virtue in the housebuying market with people prepared to sit it out to find the right home for them.’

Sir Jon Cunliffe called for action to be taken to stabilise the housing market, saying that it would be ‘dangerous to ignore the momentum that has built up in the UK housing market’.

The Royal Mail’s data also shows that two out of every five parents who have helped their children to buy property are concerned about their own finances later in life.

And the report raised concerns over the possible emotional stress inflicted upon aging parents as they continue to work to accommodate their children into their twenties.

The Office for National Statistics has released figures showing that 3.3 million aged 20- to 34 years old lived with their parents in 2013 – the highest number since it started keeping records in 1996.

 

How To Prepare For Retirement And Choose A Pension Plan

Thursday, December 19th, 2013

In uncertain times, it’s as important as ever that you get the best pension plan possible. There are so many options available however, and the chance to save – or lose out on – a significant chunk of cash for the years ahead.

That’s why it’s best to shop around, read the small print and be as sure as you can that you are buying in to a plan that’s right for you.

One of the biggest choices you need to make as you prepare for retirement is also the first. You’ll need to pick an annuity provider – basically, an insurance company that will pay you a fixed income for as long as you live. This is in return for the money you’ve already saved in your pension pot.

Like any form of insurance, there’s an element of risk involved for both parties. In essence, you’re more likely to benefit the longer you live after retirement – the providers, on the other hand, will pay out less if you pass away sooner rather than later.

When you do pass, the company keeps whatever money you have already given them – it doesn’t go to your next of kin, the government or anyone else. So the insurance companies refer to your lifestyle and actuarial tables in calculating how much you’re eligible to receive.

Many pensioners simply accept the rate offered by the insurance company they’ve used throughout their life, thinking it may be the best, or close enough to the best, rate they could be offered.

However this is actually a relatively competitive market. You may be able to do a lot better than you realised, so do ask around and see what other providers can offer you.

When you do shop around, be sure to divulge any information that might increase your offer.

For example, if you smoke, are overweight, or have a medical history, you may be quoted a better rate. To be blunt, that’s because the provider in question reckons that indications of illness will result in a shorter lifespan for you and a better deal for them.

It’s estimated that up to 70% of retirees could qualify for an enhanced rate, but only a fraction actually get it.

If you can negotiate a high rate though, you can beat the system by living as long as you can, and receive a guaranteed income for the rest of your life!

We do stress that you take the time to research properly, as it’s so easy to change providers before you start receiving your pension – but you can’t switch afterwards.