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Tax rises drive up home insurance premiums

Home insurance prices are increasing due to an impact of government tax rises, according to insurance market research agency Consumer Intelligence.

Home insurance premiums rose fastest for over-50 householders with above-inflation growth of 3.6% to £117 in the year to April 2017, compared with just 1% for under-50s to £124.

Annual premium prices rose by 2% to £121 in the past year, with prices increasing by just 0.2% in the first 3 months of this year.

Further findings:

  • the North East (3.3%) and Yorkshire & Humberside (3.2%) saw the biggest increase in premiums over the last year
  • Londoners (£144) still pay the most for home insurance premiums.

Consumer Intelligence expects the increase in insurance premium tax (IPT) – from 10% to 12% from 1 June 2017 – will continue to push prices further.

John Blevins, consumer intelligence pricing expert at Consumer Intelligence, said:

“It is worth noting IPT rates have pushed premiums up by 2% in the last 12 months and we expect premiums to rise further in June when it increases to 12%.

“There is no indication prices will come down and new rules making insurers include last year’s premium with renewals may have some impact on new business rates.”

Contact us to discuss how these changes will affect you and your business.

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SMEs hit by rates relief delay

Small businesses are still waiting for financial support promised in the Spring Budget to help them cope with rising business rates.

Chancellor Philip Hammond announced a £300 million fund over 4 years to provide relief for smaller businesses most affected by revaluated business rates, which came into effect on 1 April 2017.

Business rates are defined as a property tax on rental values. 

Total funding available to support local authorities’ discretionary relief scheme is:

  • 2017/18: £175 million
  • 2018/19: £85 million
  • 2019/20: £35 million
  • 2020/21: £5 million.

Under the revaluation, small business rate relief will gradually fall from 100% to 0% for eligible properties with a rateable value of £12,001 to £15,000.

Businesses using 1 property with a rateable value below £12,000 will not be required to pay business rates. 

Firms no longer getting small business rate relief will not see their bills increase by more than £50 a month from 1 April 2017 to 31 March 2018.

Contact us to discuss how these changes may impact your business.

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Retirees fear savings will dry up

More than 1 in 3 (35%) retirees fear their retirement savings will run out before they die, according to research from SunLife.

The insurance firm polled 50,000 people over the age of 50 and found a further 28% are concerned about money.

Ian Atkinson, director of marketing at SunLife, said:

"Our research shows the vast majority of retired people (85%) think they retired too early; while there could be many reasons why they feel this way, our research suggests money is the main issue as a third are now concerned their money won't last as long as them."

47% of over-50s still in employment said they don't have enough money stashed away in their pension to cover retirement, while 38% said cash is their primary concern.

SunLife claim these fears have sparked an upturn in the amount of employed over-50s who are seeking to bring in extra revenue to supplement their monthly pay packet.

Atkinson added:

"Our research shows millions of retirees are currently earning extra cash.

"What our research shows is people aged 50+ do not see themselves as old, quite the opposite.

"Turning 50 has given them the push they needed to try something new, so there are plenty of things retirees can do if they are concerned about their finances."

Contact us to discuss your retirement options.

 

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Almost half of homeowners go close to overspending

Nearly half (45%) of homebuyers pushed their budgets to the limit when purchasing properties in the last 2 years, according to a study by Which?

Out of 2,000 homeowners surveyed by the consumer watchdog, 24% spent less than they had budgeted while 19% who over-budgeted paid more than 15% above their limit.

Around 1 in 3 homebuyers aged 25-29 went over their budget when buying a home, with 25% of first-time buyers overspending. 

Just 19% of homebuyers who have bought before had spent over their planned budgets.

The highest proportion of people who overspent on their budget was in the South East (3 in 10), with a third of homebuyers in Yorkshire were under budget.

David Blake, mortgage advisers at Which?, said:

“It’s important to take a long-term approach and be realistic about affordability when buying property. 

“Given how easy it can be to go over budget, ensuring you have all the right information could not be more important. Seeking independent mortgage advice early on is vital in order to know what options are open to you.”

Talk to us about your personal financial planning.

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P60 deadline final reminder

If you have yet to issue your staff with P60s for the 2016/17 tax year, the final deadline is 31 May 2017.

Employees recruited by an employer on the last day of the tax year (5 April) must be given a P60 electronically through the payroll system. 

If your payroll system doesn’t automatically produce P60s, paper forms can be ordered from HMRC.

A P60 summarises their total pay and deductions for the tax year.

Employees require a P60 to:

  • claim back any overpaid tax
  • apply for tax credits
  • provide evidence of income if applying for a loan or a mortgage.

If a change is required to a P60, you need to provide a new form to employees marked ‘replacement’ and a letter to confirm the change.

Talk to us today about your reporting obligations.