01159 727666 info@blowfish-fs.co.uk
The Bank of Mum and Dad.

The Bank of Mum and Dad.

The Bank of Mum and Dad is still playing an important role in the UK housing market, with young and even some middle-aged adults continuing to receive financial support from their parents for their first and subsequent property purchases.

Their assistance, however, has helped fund nearly 20% fewer purchases than in 2018, a symptom of a general reduction in transactions across the whole market. Those who have been helped have enjoyed an increase in lending – the average contribution this year is £24,100 up from £18,000 last year2, a rise of over £6,000 which is double the average UK house price increase to March, possibly reflecting the choice of a house rather than a flat as a first home.

The Bank of Mum and Dad is set to lend £6.3bn this year, up from £5.7bn in 2018, making it the 11th largest mortgage lender in the UK and it has supported nearly 20% of transactions in the UK mortgage market over this period.

This funding is set to become the norm with 35% of prospective buyers who are planning to purchase a home in the next five years expecting to rely on financial support from their family.

2Legal and General, June 2019

Gender protection gap revealed.

Gender protection gap revealed.

Figures released by financial software firm IRESS highlight a substantial difference in protection sums assured across the gender divide, raising concerns that women are at far greater risk of being underinsured than their male counterparts.

Stark contrast

While the analysis2 found no significant difference in the number of men and women arranging protection cover, it did reveal large variations in the sums assured. For instance, male sums for critical illness were typically 90% higher than equivalent female ones, while for life cover, the difference was over 50%.

Given the gender pay gap, it may be expected that men will have more protection cover than   women. However, IRESS Executive General Manager, Dave Miller, admitted to being ‘taken aback’ by the size of the differences.

Review your cover

If you’re concerned about your level of cover it might be time to review your protection needs. Cover is relatively affordable and should form an integral part of everyone’s financial planning. Get in touch.

2IRESS, July 2019

The growing appeal of multi-asset funds.

The growing appeal of multi-asset funds.

It’s no secret that, in recent times, a combination of geopolitical uncertainties, weaker growth and increased volatility has heightened awareness of risk amongst investors. And this, in turn, has sparked fresh interest in multi-asset funds, as investors try to manage risk and protect capital whilst also seeking growth opportunities.

Why invest in multi-asset funds?

Multi-asset funds invest in a combination of asset classes, which typically include equities and bonds, but can also cover a wider range of assets such as property and commodities. Their appeal is that they provide diversification and thus ensure investors ‘do not put all their eggs in one basket’.

Surge in sales

Increased interest in this sector has fuelled a surge of new money into existing funds and a flurry of new fund launches too. According to Morningstar, there are now 1,027 UK domiciled multi-asset funds, while Investment Association data shows the mixed-asset sector was last year’s bestselling asset class with net retail sales of £7.9 billion.

While the wide choice of funds is clearly great news for investors, it has enhanced the need to seek advice.

Too stressed to move home?

Too stressed to move home?

What’s putting you off moving?

Setting aside a sluggish property market, it seems that, for many of us, it’s the thought that the process is just too stressful. The costs, finding a new mortgage, lack of certainty about a new area or a fear of the unknown has put off 60% of homeowners1 placing their current home on the market and looking for a new one.

It’s often said that moving home is more stressful than getting a divorce, having a baby, starting a new job or getting married. On the flip side, 62% say they are happier once they have actually made the move, so the key to a successful move is to identify the potential sources of stress and uncertainty and do all you can to eliminate them.

Embrace change

Some of us like change in our lives but for others who like familiarity it can be a source of anxiety. A new area, commute, schools and healthcare can be enough to make you decide to stay where you are. So, in preparation, spend time in the new area, talk to potential neighbours, check out the local amenities and visit at different times of the day/week to check noise levels. Addressing each of these issues will hopefully make you feel in control and more positive.

Finding a new mortgage

The finances of a move may be your biggest worry. Whether you need to increase the size of your loan, transfer your existing mortgage or find a new provider, speaking to us early in the process, even before you have identified your next home, allows you to consider your options and review the likely repayment costs. Yes, there are some unknowns involved in a move but remember that for many it’s a change for the better.

1Yopa, 2019

How much do you need to retire comfortably?

How much do you need to retire comfortably?

People on an average salary who wish to retire at the age of 65 will now typically require a pension pot of almost £450,000 in order to fund their retirement until they are 100 years old, recent analysis has found1.

Never too early to start saving

The research also shows that an individual who starts saving into a pension at 25 years of age will need to invest around £235 a month in order to accumulate a retirement fund of that size. However, a delay of 10 years would see this monthly figure almost double to £428, while someone who only starts saving at the age of 45 would need to set aside £859 a month to attain a pension fund of that size.

This analysis vividly demonstrates the benefit of starting to save for retirement at the earliest opportunity, ideally from the day you first start work. While other financial challenges can inevitably make this difficult, investing regular amounts in a pension throughout your working life provides the best chance of building up sufficient money to enjoy a prosperous retirement.

Better late than never

Although it’s undoubtedly better to start saving for a pension early in your working life, it’s never too late to begin saving for your retirement. Employer contributions, including those made through automatic enrolment, allied with the favourable tax treatment pensions enjoy and their potential for investment growth means that any contributions you make later in life can also still make a huge difference to your standard of living in retirement.

Make pension saving a priority

While it can seem a long time until retirement, it does come round a lot faster than people expect. So, the sooner you engage with the topic, the better the chance of enjoying the retirement you deserve.

1AJ Bell, June 2019

Tending your portfolio will make it bloom.

Tending your portfolio will make it bloom.

All successful gardeners will understand the need to regularly tend their plants, shrubs and lawns in order to ensure a garden can flourish. And, for investors, taking a similar approach with their financial affairs can also bear fruit by ensuring their investment portfolios don’t become neglected and, as a result, underperform.

Weeding, sowing…

As with a garden, your investment portfolio requires regular careful attention in order to ensure it continues to grow. Typical tasks include weeding out any perennially underperforming funds and switching to potentially more profitable ones and, for those with new money to invest, sowing the seeds of your portfolio with carefully selected additional new investments.

…pruning and trimming

Another important task is pruning. This will ensure your investment portfolio stays balanced and continues to fully reflect both your current and long-term financial goals as well as any changes in your appetite for risk. It may also require taking profits at certain points in time to ensure you are using any potential tax allowances.

However carefully your initial range of investments were selected, your portfolio will also inevitably get out of shape over time. This creates an ongoing need to regularly review the allocation of different asset classes, such as cash, equities, bonds and property. And such a review may result in the trimming back of certain assets in order to restore balance to your portfolio.

Help is at hand

Many people now seek professional help to create and maintain their garden and it’s obviously wise for investors to do the same thing. Indeed, with ongoing political and economic uncertainties causing increased market volatility, there has arguably never been a more important time to seek professional financial advice. Keep in touch, so that we can help you keep your investment portfolio in full bloom.