Archives for General

So What’s New?

Well how about this! First post in over 2 years. Is anybody there? Is anybody reading this?

Regardless of dwindling readership I think it’s a good time to start writing again. There’s no guarantee this will become regular again or if there will even be another post after this one. Who knows what tomorrow will bring!

I might decide to become a YouTuber or start tweeting!

For now, a bit of an update.

I’ve self studied and passed all the required exams to become a Level 4 qualified financial adviser and now provide independent financial advice. I chose the CII (Chartered Insurance Institute) route and despite the IFS now having a route to Chartered Status I’m thinking of sticking with the CII. Some might say that’s madness, it’s like swimming in treacle but others will know it’s the right choice.

I’ve renewed my mortgage permissions so I’m doing them again now too. So full steam ahead in that department.

This site however will still not provide actual advice. Just helpful ideas and information. If you want advice, head on over to my financial adviser site and we’ll go through the correct regulated procedure to ensure you’re properly protected!

In addition to becoming an IFA I’ve also had a baptism of fire into WordPress developments I hadn’t been keeping abreast of.

I’m now using a much better and more flexible theme builder (Ultimatum), Visual Composer and CSS Hero for much greater design flexibility. I’ve beefed up security after some hacking attempts and I’ve even converted almost all my sites to mobile compatibility (some with images that only appear or disappear on mobile devices!). SEO has been improved thanks to plugins that have evolved into truly credible optimisation tools.

You may (or may not) however notice that this site has not undergone any updates, changes or improvements.

They will come. After much head scratching.

So, that’s where we’re at now.

With a bit of luck the next post will provide you with something useful to take away and digest or put to good use.

PS. Did I mention I met Jordan Belfort? AKA The Wolf of Wall Street?

Something about a Tax Refund?

Our tax pays for the public services that we all use, so most of us don’t see it as a problem that we have to pay it. However, a high tax bill can put a serious dent in one’s income and when it comes to tax refunds, not all of us know if we are entitled to one or what we’re entitled to.

Let’s delve into some of the factors that can influence how much we pay and if we may be able to receive a refund.

Your tax code

An incorrect tax code is possibly the most common cause for overpaid tax (if you are employed). This can happen for several reasons such as information not getting updated at the tax office, your employer making a mistake on a PAYE return or simply accepting that you must be one of the lucky people that pays a lot of tax and not questioning it.

The number on your tax code, when multiplied by ten (give or take £5), is the amount of money you can earn before you pay tax. This is known as your ‘personal allowance’. The letters mean various things:

L – you are entitled to the basic personal allowance (currently £8,105 for the 2012/13 tax year)
P – You are aged between 65-75 and eligible for full personal allowance (£10,500)
Y – Over 75 years old and eligible for full personal allowance (£10, 660)
T – The HMRC believes there are other items that need to be considered when calculating tax
NT – No tax is to be taken
BR – ‘Basic rate’, which is at 20%
D0 – You income is tax at a higher rate, around 40%

If you think that your tax code is wrong you can get in touch with HMRC on 0845 300 0627 (I got the number from here: http://search2.hmrc.gov.uk/kb5/hmrc/contactus/view.page?record=hpkspulskxM

Check your previous Tax Returns

If you are self employed or have additional income to your usual job you should be submitting a Tax Return every year. This provides HMRC with details of your income and your expenses. The simple way to work out how much tax you pay is to subtract the expenses and then your ‘personal allowance’ from your income and you pay tax on the rest (profit!).

If you haven’t entered all of your expenses then the profit will be higher and so will your tax bill. It’s best to get advice from a good accountant about this or you could be paying too much tax and you (or a bad accountant) could have been making the same mistakes for years.

Go back through your previous tax returns. You can amend the figures and claim for a refund from up to four years ago.

You can’t just make up more expenses; you need to have the proof and as you’re supposed to keep everything for 6 years anyway that shouldn’t be too much trouble should it?

The important thing to note is you can only use expenses that have occurred in your direct line of work.

To make the process simple there are (as one would expect) companies that specialise in helping people obtain tax refunds. One such is RIFT who started in 1999 and to date have helped claim back over £30 million!

Make an effort not to declare tax free income

There are a few savings and investment products that can be utilised to ensure your savings aren’t hit by tax. The most well known of these is the ISA which, offers you tax free interest on your savings. Don’t declare the interest as income from these types of savings to the HMRC. It’s not evading tax – these savings are tax free for a reason!

If you’re not sure about that it actually confirms as much on the HMRC website.

The specific wording is: You do not have to declare income and capital gains from ISA savings and investments or even tell your tax office that you have an ISA.

Are you saying ‘Doh!’ about now?

If you are then decide if you need to seek professional help (for your tax). If you are paying too much tax because of a mistake in your self-assessment form it may take a keen eye to spot it and may require an audit by a bookkeeper but once you get it right you will get the tax back that you didn’t need to pay.

Look into everything you earn and what you spend to make sure that you’re paying the correct amount of tax.

Keep every receipt! In fact, keep everything! Let your bookkeeper sort it out! That’s what good ones do!

Blink and Miss History – It’s Eye Opening!

In times of economic uncertainty, people striving to make a living can so easily bury themselves in work and while getting engrossed by work is a sure-fire way of getting things done, in this fast paced world in which we live it also means we may not be paying attention to everything else that’s going on around us.

Pause for one minute, stick your head up and look around and it’s amazing to see what’s gone by in just a few days.

Admittedly, some weeks are less impressive than others but with so much news available at all times from all over the world there is always something amazing happening. Be it good or bad news, the world is definitely spinning very fast.

And what a week it’s been!

This whole business of America’s long-term federal debt being downgraded by Standard & Poor’s for the first time is all still part of the fallout of the ‘credit crunch’. Remember that term?

The world is still trying to sort out the mess of debt that has been floating around for the last few years. Governments need to reduce their levels of debt but with slow economies the revenue isn’t sufficient to keep pace the with former rates of spending. Hence austerity measures such as tax rises and lay-offs which curb spending and attempt to increase revenue but also cause public spending to falter.

Governments have tough choices to make because no government wants their country or citizens to struggle financially.

Should S&P have downgraded the US long term debt? None of the other credit agencies did.

They apparently overstated the US debt by $2 trillion and in addition they claimed the downgrade was also due to the inability of the current administration to make decisions ‘at a time of ongoing fiscal and economic challenge’.

It’s true, the decision to raise the debt ceiling was made at the last minute but with so many decisions to make and so many factors to consider I would have used all of the available time to really thrash out the alternatives before making a decision too.

There was panic selling as confidence wained and investors fled to safer havens. Stock markets around the globe crashed and suffered huge losses only for many of them to bounce back days later but with warnings of more volatility to come.

Some fear another global recession which is more likely only going to be even slower growth than expected although it seems every growth prediction result these days is just short of the mark.

It seems the world is desperate to return to heady days of boom, boom, boom instead of sucking up and accepting slow, steady sustained growth and so the madness continues.

Technology, internet, gadgets and social media has altered perceptions and people still want the latest and greatest things now and they are not prepared to wait until tomorrow. As a result, Apple has more money in the bank than the US government! (I wonder, how many iPad purchases were made using a credit card!)

Lloyds is still suffering with PPI claims which pushed it to a £3.3 billion loss for the 6 months up to June and amidst all the news about London riots they slipped in another announcement of further job cuts.

Yahoo, once the US’s favourite search engine and a piece of internet history is now apparently worth less than it’s holdings in other companies so anyone able to buy Yahoo may be able to sell off these holdings and potentially make a profit!

I think the phrase is ‘it’s all going off’ but if you follow the news from around the world, it’s always ‘all going off’.

On a final note for today, London and other UK cities are a mess from the recent violence which has resulted in loss of property and loss of life and nothing good will come as a consequence of the rioting. My sympathies to all who have lost property and my sincerest condolences to anyone who has lost a friend or family member.

How’s the Economy Looking Today?

By looking at 3 aggregated news stories on Google from this day in history the picture appears to reveal a pretty bleak outlook for times ahead and not just for UK consumers but for industry too.

Public sector job losses may not be offset by growth in the private sector as the Government is hoping and despite talk that investment in industry is the way to plough Britain out of the quagmire, industry will still struggle with rising costs in the same way as consumers.

Story 1.

Cash Strapped Companies Risk Insolvency

‘HM Revenues and Customs (HMRC) has revealed that growing numbers of cash strapped companies that have put off paying taxes are at risk of insolvency because they simply haven’t addressed the root causes of the difficulties.’

This story explains how a growing number of business are having to make payment arrangements with HMRC to pay their tax bills.

This arises when business reach the end of their tax year, calculate their tax bill and find out they don’t have enough money in the bank to pay it. Poor planning can be the culprit but so can a reduction in income or an increase in expenses.

So if a growing number of companies are struggling how are they going to be able to afford to employ more people?

Story 2.

Consumers flee high street after rise in VAT

‘Consumers fled the high street in droves last month, according to industry figures released today. They showed that a slump in sales following the government’s VAT hike became entrenched during February.’

This is a real worry in my opinion. Rates are low and mortgage payments are at record lows and yet consumers are starting to curb their spending.

What happens if rates are put up? Even less spending which means less buying from businesses which means businesses suffer which means they can’t employ more people.

With the rising cost of essential energy and fuel purse strings are tightening.

How much is fuel duty? Why is it so heavily taxed? Oh, it’s because everyone needs it. The demand is out of necessity so people & industry will pay whatever the price (to an extent).  But that’s another story…

Story 3.

UK economy growth forecast for 2011 cut by BCC

‘The UK economy will grow by less than expected in 2011 but growth in 2012 will be better than predicted, the British Chambers of Commerce forecasts.

The group downgraded its forecast for UK GDP growth in 2011 to 1.4% from a December forecast of 1.9%’

OK so the numbers are small but the difference means expectation has been downgraded by over 26% which is huge.

The unemployment forecast is up from 2.6 million to 2.65 million which just looks like 0.05 but is actually 50,000 more people expected to lose their jobs.

On the plus side, the forecast for 2012 has gone up! (I wander if this is with or without factoring in the cost of the Olympics?)

Overall though today’s outlook appears pretty bleak.

Still, at least the sun is shining…

Nearly in the News

There’s a really handy feature of the BBC News website whereby readers can submit comments about a given story and share their experiences (it’s only available for a short while after a story is published so you have to be quick).

I recently read a story about MBNA hiking interest rates and as I would be most pleased if MBNA collapsed and all the senior staff ended up shouldering massive debts, I thought I’d make a comment about my experiences.

Shortly after I had an email from a reporter at the BBC asking me to get in touch. I had a few things to do before I had a chance to respond but I did and later that day I had a phone call from the reporter who asked me a few questions about my experience and if I would mind being interviewed. She told me the story may run later or another BBC show may pick up on it and ask me to comment.

I have to admit to being quite keen to share my experience of the way MBNA conduct business but alas the call never came.

Then yesterday, another call from the BBC! This time is was only because my experience was relating to debt and they wanted to ask me about my attitude towards debt and if it had changed since the financial crisis and the ongoing effects thereof, such as the recent VAT rise etc.

I happily exchanged information and I was once again asked if I’d mind recording something later for the news. It was explained to me that I didn’t quite tick all of the boxes in terms of what the model they had in kind but if they didn’t speak to anyone who was a closer fit they would be back in touch.

Alas, once again the call did not come.

But, on a positive note, I am now much more likely to submit a comment again if I read a story that has either affected me or I have some knowledge of because I now know there is a chance I may be able to contribute in some way.

So get involved, have your say.

Getting My Head Around RDR

I’m trying to find a succinct and comprehensive explanation of RDR and what it means for consumers but so far I’m struggling so I’m going to try and piece something together from what I can find which, is mostly how it will affect advisers.

Interesting that a change to the investment market that is intended to benefit the consumer does not appear to be very well publicised. In fact, I searched for it on the FSA consumer website Moneymadeclear and I couldn’t find anything.

I think quite a few people would be grateful if the FSA started to make the public more aware of what to expect.

RDR = Retail Distribution Review

In the words of the FSA:

“We launched the Retail Distribution Review (RDR) in June 2006 to address the many persistent problems we had observed in what is now, over 21 years of regulation of the retail investment market. Insufficient consumer trust and confidence in the products and services supplied by the market lie at the root of what we are seeking to address.”

And to plagiarise another source : (http://www.eacg.co.uk/media/documents/Retail_Distribution_Review_Feedback_Statement.pdf)

The FSA proposes to build confidence and trust by:-

• Providing greater clarity for consumers about the advice service being offered. There will be a clear distinction between independent advice and sales advice and a natural link with the proposed free Money Guidance service.

• Raising professional standards of all advisers. To boost consumers’ confidence in the industry new minimum qualifications will apply for different types of advice and as a major development there will be a Professional Standards Board.

• Modernising the way advice is paid for by removing the possibility of commission-bias and ensuring the cost of all advice is clear to consumers whenever it is given.

• Introducing a new standard for independent advice by ensuring advice is unbiased unrestricted and extends to all types of investments. Independent advisers must agree the cost of financial advice with customers up-front.

So that all sounds very nice but it doesn’t explain how any of it will be achieved so by taking each point and expanding with what I have found out so far….

1/ Providing greater clarity for consumers about the advice service being offered. There will be a clear distinction between independent advice and sales advice and a natural link with the proposed free Money Guidance service.

To achieve this, advisers will describe the advice they provide as either ‘independent’ or ‘restricted’.

2/ Raising professional standards of all advisers. To boost consumers’ confidence in the industry new minimum qualifications will apply for different types of advice and as a major development there will be a Professional Standards Board.

Fairly self explanatory. Advisers will need to be more highly qualified to provide advice and have specific qualifications to advice in specialist areas.

3/ Modernising the way advice is paid for by removing the possibility of commission-bias and ensuring the cost of all advice is clear to consumers whenever it is given.

This is good for consumers because in the past, advisers have been known to sell a product that pays higher commission and makes them more money instead of a product that is of the most benefit to the consumer. However, this also means advisers will no longer receive commission from product providers which is currently how they earn a living.

4/ Introducing a new standard for independent advice by ensuring advice is unbiased unrestricted and extends to all types of investments. Independent advisers must agree the cost of financial advice with customers up-front.

This is how advisers will earn a living after the changes take effect, by charging the consumer a fee for the advice/service.

Sounds OK but there is considerable debate about the true benefit of the proposals.

There can be no argument that taking away commission bias will be good for consumers but many predict that charging a fee for advice will result in a very high percentage of former customers going to high street banks where they don’t have to pay but they wont get advice, just the banks own products.

This will actually restrict peoples access to the full range of financial products on the market instead of making them more accessible which, is one of the key concerns of the review.

It is a concern that truly Independent Financial Advice could become something reserved for the wealthy.

This is a concern (mainly of advisers) because historically commission can be very good and advisers want to earn the same levels of income which means charging a high fee. 

By charging a low fee to a lot of people a firm of advisers could conduct higher volumes of business and keep turnover up but there would be more work involved so earnings are still likely to be reduced.

Making financial products accessible to the public in a fair manner appears to be the main concern of the FSA, not how much advisers stand to make.

~

I Forgot to Mention

On the 22nd of October I passed the Investments & Risk module of the IFS Certificate in Financial Advice (CeFA).

This is the IFS qualification that is needed to be recognised as an IFA and until 2012 the 4 modules are:

  • UK financial services industry, regulation and ethics
  • investments and risk
  • protection
  • retirement planning
  • After 2012 the Diploma in Financial Advice (DipFA) will be required to continue working as an IFA.

    So, I’m pleased I’ve got the recent exams out of the way but there’s still a way to go!

    I’ve already received and started on the next module ‘Retirement Planning & Protection’ (2 more exams).

    Once that’s out of the way there’s another Module ‘Assessment of Investment Advice Knowledge’ followed by a 2 hour exam that tests the application of all previously aquired knowledge.

    At that point I can start to gain more practical knowledge but as the DipFA takes 9 months to complete I need to get started on that by March 2011.

    And it’s already mid-November!

    Some people say it’s not a good time to get into the industry because of new regulation and an impending overhaul that is threatening to cause major upset and from what I’ve read and discussed with others it certainly sounds like that is going to be the case. (See next post – still in progress!)

    But as I have quite a keen interest in the industry and I’m already well on my way I have no intention of stopping now and even if the industry collapses at least I’ll  have learned something!

    All I have to do now is squeeze it into my routine.

    It’s 7.15 on a Wednesday evening and I think I’ll finish early for a change…

    Finding Cheap Flights Online

    When searching for cheap flight deals, timing is crucial. In the opposite fashion to package holidays, last-minute deals can rarely be found, as most airlines structure their prices to increase as the number of seats available decreases. Start your search well in advance of your dates of travel, and use the internet to quickly search for the cheapest option.

    There are four different ways to find cheap flights specifically, depending on your plans and requirements.

    • If you know precisely where you’re going and when, use a ‘screen-scraper’ website.
    • If you want a combined flight & hotel break, use a flight broker website.
    • For traditional package holiday-style deals, use a charter comparison service.
    • To find super-cheap flight sale deals anywhere, use an online service like ‘Flightchecker’.

    ‘Screen-scraper’ websites are advanced price comparison websites which use sophisticated software to search-and-report from multiple websites in one fell swoop. You enter the dates and destinations you wish to fly between and the website automatically searches budget airlines, regular airlines, and flight brokers – presenting you with a price comparison of the results with the cheapest at the top. It’s best to try a number of ‘screen-scraper’ websites to find the best deal as they don’t all search the same sites, try this selection for starters: ‘Kayak’, ‘Travelsupermarket’, ‘Sidestep’, ‘Kelkoo’, ‘Nowfly’, & ‘Openjet’.

    Flight brokers have commercial partnerships with airlines to offer special deals, which can extend to hotels too.  Many ‘screen-scrapers’ check the major flight brokers, but for long-haul destinations they may have deals not listed elsewhere, and can give uniquely good deals on flight and hotel packages. Good flight brokers to try are ‘Netflights’ – especially good for long-haul destinations, ‘Expedia’, ‘Opodo’, and ‘Travelocity’ – which many screen-scrapers miss.

    Charter flights are bespoke flights chartered by package holiday companies to ferry their passengers. If you’re headed to a popular package holiday destination, you may be able to find one-off cheap deals, as operators often fill spare capacity on their planes by selling seats cheaply to flight-only customers. You can try charter airlines and travel agents direct and local travel agents, or use an online charter flight comparison such as ‘Flights Direct’ or ‘Avro’.

    Budget airlines often announce sales with “x number of seats available for £1”, yet these can be hard to find. ‘Flightchecker’ is an online tool from ‘MoneySavingExpert’ that collates searches of the latest offers from nine major budget airlines, and can be used to search by date, destination, or price. It is important to remember that prices quoted by budget airlines are often ‘fare only’ and do not include taxes, baggage charges, and check-in fees. 

    When making holiday plans, it is important not to discount the traditional package holiday. D-I-Y flight and hotel deals have become popular in recent years, but for week, 10 day, and fortnight-long trips, flight and accommodation packages can often be competitive. Package operators have the advantage of being ATOL protected which can mean a full refund if your trip is cancelled.

    You may consider booking a package but not staying in the accommodation as a way to get a cheap flight. If there are no charter flights available, booking a package holiday but not using the hotel can still be much cheaper than booking a scheduled flight to some destinations.

    Free European flights can sometimes be found through promotional flight sales as mentioned earlier, but also with airline-linked credit cards that offer a free return trip as an incentive for applying. Alternatively, if you’re a student or under twenty-six, specialist agent STA Travel guarantees to beat scheduled flight prices and can be very competitive. One final method worth trying is to use a ‘location specialist’ – depending where you’re looking to fly to. In areas of the UK with a significant immigrant population, niche travel agents exist and can offer very good deals to the countries linked to that community.  These are not widely known of, and can come up with real bargains.

     

    Staying Safe Online Cheaply

    Online fraud and the threat of malware is an ever present danger as we use the internet day-to-day. Here are a few pointers to keep your computer and personal information protected when online  cheaply!

    For all secure websites you use, have passwords that can’t be easily guessed. Avoid information that could be worked out, such as dates of birth and family names. Use random letters, numbers and non-alpha numeric characters to make a password that seems impossible to guess, and therefore makes it harder for intruders to hack into your system. Change passwords regularly – especially for online banking sites, and have different ones for different sites.

    Whenever you’re being asked to make a payment online, you must ensure that the connection is secure. If you can’t be sure – don’t make the payment, contact the vendor to ask why the payment system isn’t secure, or simply buy elsewhere. There are a few ways to know:

    • “https://www…” rather than “http://www…” the additional “s” indicates a secure server. 
    • The Padlock symbol: If a site is secure, a padlock symbol will be displayed on the browser window in the correct place. Ignore icons and symbols shown inside the main body of the website, only a symbol on the window itself means the site is secure. Website creators can only control what appears inside the body of a browser window – they can’t add the padlock symbol onto the window itself in the correct location.
    • Have a quick scan of the web address to make sure it isn’t a dodgy impersonation of the correct site.

    Install a quality anti-virus program and keep it up to date – there are a number of free antivirus downloads and completely free to use programmes available. Use your anti-virus software to do the following:

    • Scan your computer on a daily basis – set it to automatically scan your computer at a time when you’re likely to be working to avoid missing scans.
    • If you find your computer is infected, quarantine or remove viruses – there are free removal tools for specific viruses online.
    • Scan all cameras, pen drives and other portable media automatically when you attach them, to prevent the passing of viruses.
    • Scan all incoming email attachments and file transfers, even from trusted contacts – most viruses are passing innocently and unknowingly.

    You should have Firewall software to work alongside anti-virus software in order to block unauthorised access to your computer. Keep it turned on at all times to filter out unwanted network access.

    A basic security precaution that is frequently overlooked by many is the regular updating of operating systems. Set your computer to automatically download and install updates and security patches. Services like ‘Windows Update‘ are free, and downloading these updates decreases your computer’s susceptibility to virus infection.  

    As a precaution it is wise to regularly back-up all your important personal information, in case something does happen to a computer. One of the most simple and effective methods is to have an external hard drive to back up onto. Periodically transfer your data to a storage device like this for safe keeping.

    Guest post courtesy of: Bullguard Internet Security

    Considering a Recession Proof Career?

    Unemployment is still rising and currently stands at 2.47 Million or 7.9% of the working population. In the last quarter another 23,000 people found themselves out of work.

    Many have been out of work for months already and are still struggling to find a steady source of income and the indication is that things are going to get worse.

    For some this has been seen as an opportunity to make life changing decisions and dedicate time and effort into a complete change of direction by pursuing or studying for a new career.

    I would always encourage somebody to do whatever it is they want as long as they enjoy it. If you enjoy your work, you will be happier and more productive and therefore more likely to progress further along your chosen career path.

    However, with the reality of a global recession in the air one’s decision may be swayed towards the kind of work that could survive through the downturn and a possible/probable future recession.

    Throughout this whole financial debacle there have been numerous news stories and articles with tips and advice on what constitutes a recession proof career and more recently trends have been identified that show which sectors currently have the highest demand for staff.

    In 2009 Yahoo News suggested The 10 Safest Jobs in a Recession:

    1/ Education – ah, now with the cuts that are coming is this still a safe bet? There are still incentives and a shortage of applicants…

    2/ Health and Social Care – Private maybe but public…not so sure.

    A quote from 2009 is now somewhat off the mark  – “This Government is committed to keeping unemployment down and therefore health, education and social services will continue to hire”.

    3/ Social and “green” housing – as above….

    4/ Accountants/finance directors/compliance officers – all pretty vital and some courses are very cheap. Woodgrove Tutorials are offering an IAB (International Association of Bookkeepers) course for just £225 – reduced from £350!

    5/ Internal audit – a very interesting career choice and certainly in demand but not something that’s easy to get into and could take a long time to qualify. See http://www.theiia.org/

    6/ Insurance – always in demand – everyone needs car insurance and buildings & contents but there’s also public liability insurance, income protection insurance, life insurance (which historically does well during recessions).

    7/ Credit Control & Purchasing – companies always need to keep money coming in and to find the best prices to reduce money going out.

    8/ Energy – everybody needs it and it just keeps going up in price… Research and development into alternative energy options is a huge growth sector.

    9/ IT – Still a massive growth sector! Look at the success of the completely pointless iPad!

    10/ Public Transport Projects – Oooh, impending spending cuts…?

    Predictions and suggestions may not be as appropriate or accurate as they were just a year ago but there are other sources available to help with the decision making process of anyone contemplating a career change.

    In April 2010 the latest Government approved shortage occupation list detailed specific job titles that are currently in short supply in the UK and the Reed Job Index provides information about sectors that are seeing an increase in demand.

    Cross referencing these with a list of dream jobs could result in a comfortable compromise that leads to a happy and prosperous future!

    The best time to do something that improves your future is always ‘now’.