Prudential survey shows that more than two-fifths of those who have stopped making contributions don’t plan to start again

More than a third of working age British adults have stopped making pension contributions, according to research by insurer Prudential.

The insurer’s study found that 35% of British adults who are to retire have stopped paying into pension schemes, with a third of those citing unemployment as the reason and another 27% saying they can no longer afford the contributions.

More than two-fifths of those who have stopped making contributions do not plan to start again, despite the impact it will have on their retirement income. Prudential has calculated that a saver who misses a year of gross contributions of £2,400 could see their final pension fund reduced by £7,000.

Vince Smith-Hughes, head of business development at Prudential, said: “Tightening your belt when times are hard is sometimes necessary, and putting pension contributions on hold might seem an easy way to save money; however, neglecting pensions today means throwing money away tomorrow, as savers will miss out on perks such as tax relief and employer contributions.

“Abandoning your pension pot really should be a last resort when times are tough. By getting into the routine of saving into a pension as early as possible, savers will be able to ensure the comfortable retirement they deserve.”

Separate research by LV=, the UK’s biggest friendly society, indicates that a third of people aged 50 or more plan to use their home as their pension. Describing such people as “Hippies” (Home is pension), LV said 2 million people over the age of 50 intend to use equity from their homes to boost their retirement income, compared to 1.5 million in 2010.

Half of those questioned intend to do this by downsizing to a smaller home, a fifth plan to move to a cheaper area, and a further fifth will use equity release schemes.

Also, only a fifth of those surveyed believed they were financially on track to retire as planned. More than a third (36%) think they will need to delay their retirement for financial reasons, while 16% would rather not contemplate their post-work finances at all.

Nearly half (45%) of those approaching retirement are considering alternative sources of income after they finish working in light of stock market falls, the research added.

If you are worried about your plans for retirement and would like to speak to an expert call Life UK Financial on 0845 6809 736 / 01233 754062 or visit www.lifeukfinancial.com

article source: http://www.guardian.co.uk/money/2011/sep/28/brits-cancel-pensions-contributions

When Illness or accidents result in a loss of earnings – could you survive on state benefits of just £94.25* per week? How to avoid this is simple, insure your earnings while you can.

The average UK Salary £25,900 That’s £384 per week after Tax & NI with just £94.25 per week benefit you would have a weekly shortfall of £289.75 or £1256.08 pcm.

To find out more about Insuring your income against accidents & Illness call Life UK Financial on 0845 6809 746 / 01233 754062, visit www.lifeukfinancial.com email: enquiries@lifeukfinancial.com

*Department of work & pensions (DWP) July 2011, based on Employment & Support allowance of £94.25 pw for those in the work related activity group. Alternative benefits such as incappacity benefits and statutory sick pay apply in some cases, for full details please refer to the DWP.

Offsetting is a way of managing your money using your current account, savings account and offset mortgage.

You can “offset” the credit balances you have in your eligible current & savings accounts against your mortgage and pay interest (at the mortgage rate) on the difference only.

This means that you could potentially reduce the amount of interest you have to pay on your mortgage. You will not, however, earn interest in your offset credit balances. When offsetting credit balances against the mortgage, you have the option of keeping your mortgage repayments as they are thre by paying the mortgage off more quickly, or keeping the original term and reducing the monthly repayments (it is important to note that your mortgage repayments may vary).

Either option could provide substantial savings.

Call Life UK Financial today on 0845 680 9746 / 01233 754062 to speak to an adviser who will be able to give you all the information you need.

Aldermore’s 100% home loan is available if a family member is willing to guarantee any borrowing above 75%

A mortgage offering homebuyers the chance to borrow 100% of the cost of their property has been launched by Aldermore bank.

The Family Guarantee Mortgage is the first home loan available to buyers without a deposit since the credit crunch. However, the deal, which is available to first-time buyers and movers, has an interest rate of 6.48% and borrowers must find a relative willing to guarantee any borrowing above 75%.

Aldermore’s managing director of residential mortgages, Charles Haresnape, said the large deposits now required by most lenders meant first-time buyers had become “disenfranchised” from the housing market.

He added: “We believe this is the single biggest issue facing first-time buyers and it needs to be addressed head on if the UK’s housing market is to have a chance of recovery.

“Family support in the form of gifted deposits has become commonplace and is widely accepted by most lenders. The Family Guarantee Mortgage gives much greater flexibility, enabling guarantors to retain savings and instead provide a guarantee, requiring no cash deposit.”

The loan, which will be piloted through three distributors – Connells Group, Arun Estates and 3mc – will only be available in England and Wales.

Buyers will only be able to take the mortgage on a repayment basis and will need to prove they can afford monthly payments on the whole amount borrowed. The guarantor, typically a parent or grandparent, will also have to prove they can afford repayments on the sum they are guaranteeing.

The maximum loan size is £250,000 and the minimum age of the borrower must be 25. There is a non-refundable booking fee of £299 and a completion fee of £999. The rate is fixed for three years.

Haresnape said: “We have carefully considered the needs of the guarantor, resulting in a guarantee that is capped at the originally agreed amount. The guarantee can also be repaid at any time, or released if the loan-to-value (LTV) on the mortgaged property falls to 75% or lower.”

After 10 years the guarantee expires, leaving the buyer with sole responsibility for the loan.

Recent mortgage lending figures show first-time buyers are still thin on the ground, with the Council of Mortgage Lenders reporting that just 18,100 loans were advanced to new entrants to the housing market in the traditionally busy month of June.

House prices that are still high relative to incomes in many parts of the country are part of the problem, but brokers said a lack of mortgage supply was also a factor.

David Hollingworth of London & Country mortgages said: “Deposit has been the big issue for borrowers, although we are seeing a slow move towards higher LTV mortgages.

“This is not suddenly going to open up a massive first-time buyer mortgage because some buyers will be sitting tight, but for someone who has seen a place they want and has decided it is the right time for them to buy, this could prove a solution.”

Ray Boulger, senior technical manager at mortgage broker John Charcol, said the deal highlighted how “disfunctional” the mortgage market had become, as unsecured loans were now being offered at a cheaper rate than home loans.

He said Aldemore’s mortgage was a welcome innovation, but expensive, and added: “It seems to be a fantastic deal for Aldemore because they are effectively offering a 75% mortgage at 100% rates.”

Boulger said other similar deals were available with much more competitive rates. Bath building society, for example, is offering a loan of up to 95%, with parents guaranteeing borrowing above 80%, at a rate of 5.29%.

“Everyone looking at these deals should see if they could find the extra 5% that clearly gives them access to a cheaper rate,” he added

Get mortgage advice from our Experts call Life UK Financial on 0845 6809 746 / 01233 754062 and we will refer you to Independent Mortgage Experts who will give all the advice you need!

Article: http://www.guardian.co.uk/money/2011/sep/05/100-per-cent-mortgage-aldermore

The British Chambers of Commerce (BCC) has downgraded its forecast for UK economic growth this year for the third time.

It now expects the economy to expand just 1.1% in 2011, compared with its 1.3% estimate in June and 1.9% at the start of the year.

The BCC said the government’s aim to rebalance the economy towards exports and business investment was not happening fast enough.

The Treasury has declined to comment.

‘Weak recovery’

BCC director general David Frost said the government had to do more to help companies grow, at the same time as continuing measures to reduce the UK’s budget deficit.

He said the government needed to cut the burden of regulation that firms faced.

“The government is right to reduce the deficit, but these measures must be matched by policies to stimulate growth,” he said.

“If we don’t get these policies right, we risk any recovery being weak and short-lived.”

Among the changes demanded by the BCC is a simplification of the planning system.

“The present system is broken,” Mr Frost told BBC Radio 4′s Today programme.

He cited the M6 toll motorway in the Midlands as an example: “Only three years to build, 18 years stuck in the planning process.

“At the moment we have a real stand-off. It’s holding back economic growth, and we need changes to the planning system to get things moving.”

The BCC has also cut its forecast for economic growth in 2012 to 2.1% from 2.2%.

It said that the Bank of England should consider another round of quantitative easing (QE). Under QE, the Bank injects fresh money into the financial system to try to boost bank lending and, in turn, the wider economy.

Eurozone impact

The BCC is just the latest organisation to announce another downgrade of its growth forecast for the UK economy.

Last month, the Bank of England cut its estimate for 2011 to 1.4% from 1.75%, with governor Mervyn King saying the outlook for the global economy had “deteriorated”.

He blamed this on the continuing debt woes of numerous national governments in the eurozone, saying that “the risks emanating from the euro area have the potential to have a significant impact on the UK economy”.

The situation in the eurozone caused extensive market volatility in August, centred on concerns that Greece’s plans to swap its government bonds for others that pay less interest over a longer time-frame will hit the earnings of banks across Europe, including those in the UK.

The knock-on fear was that other governments may ultimately have to follow Greece’s lead as they seek to lower their budget deficits and overall debt.

Other bodies that have recently cut their UK economic growth estimates include business group CBI and the National Institute of Economic and Social Research.

The government’s Office of Budget Responsibility currently forecasts that the UK economy will expand by 1.7% in 2011.

However, that estimate was made back in March and its chairman, Robert Chote, said in a newspaper interview last month that “there aren’t many people” who now believe growth will meet that target.

‘No gloom’

The most recent official figures from the Office for National Statistics (ONS) showed that the UK economy expanded by just 0.2% in April to June, down from 0.5% between January and March.

It said that growth in the second quarter was restricted by a number of one-off factors, including the extra bank holiday in April for the royal wedding and the Japanese tsunami affecting the import of car parts from Japan.

However, the UK economy’s limited growth also comes as consumer spending continues to be hit by a number of factors, including higher inflation, job losses and limited wage rises.

The ONS said retail spending excluding petrol grew just 0.2% in July, a slowdown from 0.8% in June.

This came as inflation in July, as measured by the government’s preferred Consumer Prices Index, increased to 4.4% from 4.2% in June. This is more than double the 2% target rate.

Meanwhile, the number of people unemployed in the UK rose by 38,000 to 2.49 million in the three months to June.

Mr Frost told the Today programme that while the BCC still expected joblessness to rise over the next three months, it could have been worse.

“[Unemployment] has not risen as much as we thought it would rise,” he said. “I don’t think the public [cutbacks] have been anything like we expected, and I think business has been holding on to labour

Article & Story from BBC News: http://www.bbc.co.uk/news/business-14735753

The number of mortgage approvals increased to a 14-month high in July, figures showed today, but fears about the health of the housing market persisted.

Mortgages approved for house purchases increased 1.5% to 49,239 in July, up from a four-month low in April, the Bank of England said.

But this represented a slowdown on the previous month, when the rate increased by 4%.

The number of approvals for remortgaging was virtually flat, after increasing by just 20 to 30,810, as the threat of an interest rate hike began to recede. This was lower than the average over the past six months of 31,340.

Howard Archer, chief UK economist at IHS Global Insight, said: “Despite mortgage approvals rising to a 14-month high in July, housing market activity remains very low compared to long-term norms.

“With consumer confidence weak and the economic outlook currently looking pretty grim, we see little reason to change our view that modest falls in house prices are more likely than not over the coming months.”

He added that mortgage approvals have averaged around 90,000 a month since 1993, while a level of 70,000-80,000 has in the past been considered consistent with stable house prices.

He expects house prices to fall by around 5% by mid-2012 as a result of “troublesome economic fundamentals and low consumer confidence”.

Brian Hilliard, an economist at Societe Generale, said interest rates have fallen but consumer confidence is “very low” and the market is “still overvalued”.

He added: “This is a recipe for continuing weakness. The housing market is stuck in a deep rut and there is little prospect of any major improvement any time soon.”

The figures come on the day that the National Housing Federation predicted that levels of home ownership would slip over the next decade as a shortage of homes drives a rise in prices.

Chris Gardner, director of mortgage brokers Obligo, said the property market is “now almost completely stagnant”.

He added: “Persistently low interest rates and a steady trickle of enticing deals from lenders are being drowned out by the drumbeat of bad economic news.

“Where once buying a home was seen as a key aspiration for young Britons, many now see it as increasingly out of reach.”

Meanwhile, the Bank said that the amount of unsecured consumer credit rose by £205 million in July, which was the lowest level since January and down from an increase of £378 million in June.

Credit card lending rose by £259 million, while there was a repayment of £54 million in other loans and advances as consumers tried to pay down their borrowings and banks reined in their lending.

For Independent Mortgage Advice call Life UK Financial on 0845 680 9746 / 01233 754062 or visit www.lifeukfinancial.com

article source: http://www.independent.co.uk/money/mortgages/mortgage-approvals-up-15-2346113.html