MORTGAGES AND PAYDAY LOANS

Everybody knows it’s more difficult to get a mortgage these days. 

But, did you know that at least one of the leading mortgage providers rejects anyone who has taken a payday loan in the past 3 months or who has had two or more payday loans within a year? 

This rule applies even when the loan has been repaid in full and on time. 

Written by Tim Corfield

NEW RULES FOR FINANCIAL ADVISERS

With effect from 1^st January 2013 IFA’s (Independent Financial Advisers) will no longer be able to draw commissions from customers. These new rules are being introduced under the Retail Distribution Review (RDR). Instead, IFA’s will only be able to charge on a fee basis – very much like an accountant or solicitor. Under the commission basis payments are made (which can be worth thousands of pounds) on the sale of various life insurance, pension or other investment policies.

This change is likely to have a significant impact on an industry already under pressure from changes in recent years. There are presently close to 50,000 people selling investment products in the UK which includes those employed by the banks and building societies. Around half of these operate as IFA’s, often as sole traders.

It is likely that for many of the smaller IFA businesses this will result in a sale or retirement and there will be fewer IFA’s in future. Inevitably this will result in the larger organisations surviving as smaller firms are taken over or go out of business.

Tim Corfield commented “Whether intended or not, this will leave much of the industry in the control of the banks and building societies and fewer people will receive financial advice in future”.

Tim Corfield - August 2012

DEBTS SOAR FOR OVER 55’s

Recent insolvency statistics make grim reading for the older generation.

In the second quarter of 2011 the typical debt level for the over 55’s was just over £17,000. By the second quarter of 2012 the figure is now nearly £25,000 – an increase of over 30%.

Tim Corfield commented “Yes, the figures are worrying. Research also shows that the cost of living for pensioners has risen by 20% due to food inflation and the increasing cost of household utilities. This is the wrong time of life to have financial problems. Let’s hope the insolvency and debt industry can make a better job of assisting these people than their lenders ever did”.

Tim Corfield - August 2012

Are our MP’s pro - business?

Yes, G4S got things seriously wrong with their Olympic security shambles.

But, I am sympathetic to the comments made by Neil Woodford, Investment Manager at Invesco Perpetual which owns around 5% of G4S’s shares.

Woodford said the verbal dressing down of Nick Buckles (Chief Exec of G4S) at the select committee meeting last month was like watching “a medieval persecution….if this is the way Parliament wants to treat business, please Parliament, don’t be surprised when businesses decide this isn’t the country for them”.

He went on to say that the behaviour of MP’s was “incredibly damaging for the economy and this country…..Companies will be thinking twice about bidding for any government work”.

It’s just too easy for politicians to have a cheap sound bite swipe at business which they think will go down well with the majority of the electorate. We’ve seen it so many times before. It would be so refreshing to see politicians recognising that we need to send a message to the global economy that the UK is open for business and looking for more.

Domestically, it is ultimately down to business to get the UK through this economic mess that has been created by the politicians! – A little bit of support from time to time wouldn’t be a bad thing.

Tim Corfield - August 2012