Glossary of Investment Terms (M)

1 in 7 retiring in 2013 will rely on State Pension

A study from Prudential has further highlighted the bleak outlook for pensioners looking to retire this year, as it was revealed one in seven will have to rely on the state pension for income. The state pension currently stands £110.15 per week, meaning those relying solely on this are going to face a very tough retirement. The study also revealed that one in five retirees is going to slip below the income poverty line, and nearly 25pc of women are going to enter retirement relying on just an income from the state pension. What this all means is that, if you put one hundred people due to retire this year in the same room, approximately fourteen of those people would be facing the..

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Another House Price rise takes London average past £500k

According to property website Rightmove, average house prices across the UK have risen for the fifth consecutive month, while average prices in the capital have surpassed half a million pounds. This year the property market has had its strongest start since 2004, and prices are now an average of 9.1pc higher than at the end of 2012. All regions across the UK also posted positive results, highlighting the gathering momentum the property market is gaining. Two separate records have been broken this month, with the average price of a house in the UK now just shy of £250,000, beating the previous record from June 2012, and the average price in London smashing through the £500,000..

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3.5m owed Tax Rebate, but 2m owe HMRC as much as £500

HM Revenue and Customs (HMRC) have reported that as many as 5.5m UK workers paid the wrong amount of tax in financial year 2012-2013. Of those 5.5m, a majority of 3.5m are owed a rebate, while 2m people will have to repay an average of between £400 and £500. The average refunds owed to those who have paid too much tax are in the same ballpark, with most set to receive between £350 and £500 from the taxman. Every year we are subject to and “end of year reconciliation process” whereby our records of tax and national insurance that we have paid are compared to records held by HMRC. HMRC has said that most people who remained in the same employment receiving the same benefits..

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Government consults on CTF to Junior ISA transfer

The Government has launched a consultation into planned changes which will allow parents to swap their Child Trust Funds (CTF) for Junior ISA’s. The consultation will be open until 6th August 2013, and a decision will be made after this time. The Government will consider responses from representative groups for children or savers, CTF holders, providers of CTF’s and Junior ISA’s, as well financial advisors. The CTF was introduced in 2004, and was issued to most children born in the UK between the dates of 1 September 2002 and 2 January 2011, as a means of encouraging parents to save for their children’s future. Within the scheme the Government committed vouchers to boost the..

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Housing demand and prices continue to rise

House prices have reached a three month high and demand from buyers is at the highest level since 2009, according to The Royal Institute of Chartered Surveyors (Rics). This highlights the growing momentum gathering within the housing market, which has seen increasing numbers of mortgage approvals and steady average property price increases so far in 2013. Government initiatives such as Funding for Lending and Help to Buy have been credited with assisting the growth of the housing market, making it easier for people to gain access to cheaper mortgages and encouraging buying. Rics have said that the demand from buyers is now at a level not witnessed since November 2009, and prices..

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Cold weather raises gas use by 18%

The cold weather in the first four months of 2013 has meant that gas use in the UK was 18pc higher than that of the same period in 2012, according to British Gas. Electricity use was also reported to be higher, with a rise of 3pc. According to the Met Office, the average temperature throughout the winter months was colder than that of 2012, while the month of March had the second coldest average temperature ever recorded. British Gas was one of the ‘big six’ gas and electricity providers to raise household energy prices towards the end of 2012, and this coupled with a cooler winter will see the company benefit hugely. However British Gas has explained that this could benefit the..

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Isa’s suffer first ever fall in Savings

For the first time in their 14 year history, Isa’s have experienced a fall in their savings value, as low interest rates, rising inflation, and a lack of trust deter savers. Cash Isa’s are tax-free savings accounts with an annual investment limit and since their introduction in 1999 have grown strongly in line with an expanding savings culture across the UK. However more recently a variety of factors have meant that savers are beginning to turn their backs on Isa’s. Figures from HMRC show that over the course of the last year the amount of new money being invested in Isa’s fell by £200m. The first reason why more people are choosing to ignore Isa’s is the low interest..

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Buy-to-let mortgage lending up in first Quarter

The amount of mortgages approved on a buy-to-let basis was up by 13.5pc in the first quarter of 2013, compared to the same period in 2012, according to the council of Mortgage Lenders (CML). Buy-to-let mortgages now account for 13.4pc of all outstanding mortgages, a rise of 0.5pc from the same period a year ago. Landlords and investors are prospering from cheap mortgage deals brought about by Government initiatives such as Funding for Lending, which makes mortgages more readily available at a lower cost. This coupled with a trend that is seeing the price of renting a property increasing, means that there is little standing in the way of those applying for buy-to-let mortgages...

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UK House prices rise in April

The average price of a house in the UK rose by 1.1pc in April, compared to March, but activity in the housing market remains low, according to Halifax. This means that house prices rose for the third consecutive month, and are now 2pc higher than at the start of the year. Despite these strengthening results, a fall in the amount of mortgage approvals in 2013 has meant that the activity around the housing market has remained low. Halifax, which is part of the Lloyds TSB banking group, has put the rising prices down to the fact that mortgage payments for first-time-buyers and home-movers have reduced by almost half as a proportion of disposable income since a peak of 48pc in 2007. The..

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FCA: No evidence interest-only mortgages were mis-sold

FCA raises fears over Interest-Only Mortgages

The Financial Conduct Authority (FCA) has spoken of its concern over the ability of more than a million people to pay off final charges on interest-only mortgages. There are currently 2.6 million people in the UK with this type of mortgage, and it is thought that over half would struggle to meet final payments when they are due. Due to this lenders have said they will contact customers to warn them about payments and prevent a payment shock, as the average shortfall is thought to be around £71,000. Interest-only mortgages are attractive as they are a cheaper alternative to repayment mortgages. Every month you pay off just the interest on the mortgage loan. However at the end of the..

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Thousands to experience rise in Mortgage Rates from BOI

Thousands of borrowers who took out tracker mortgages with the Bank of Ireland (BOI) will see their rates increase from Wednesday, leading to a barrage of official complaints. The change in rates will affect around 13,500 homeowners, most of which are landlords who bought on a buy-to-let basis. However any complaints are set to fall on deaf ears as BOI says that customers were warned that the fact that their rates were subject to change in the terms and conditions when they applied for the mortgage. Despite this, there have been calls from lawyers for those affected to make official complaints to both BOI and the Financial Ombudsman Service, in a move which could see those affected..

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Kodak Pension Plan Members to receive reduced Benefits

Members of the Kodak Pension Plan (KPP), of which there are thought to be 15,000, will receive reduced pension benefits after Kodak’s parent company, Eastman Kodak, was declared bankrupt. KPP was forced to pay £419m to buy the business and in doing so save the company from closure. KPP now owns the companies entire film business, which consists of hundreds of thousands of photo kiosks worldwide, as well as photographic paper and souvenir photos at venues such as amusement parks. Eastman Kodak filed for bankruptcy in January 2012, 120 years after it was founded in New York City. The deal from KPP is still to be examined in US court, but it is thought that the hearing scheduled..

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UK Economy avoids triple-dip Recession

The UK economy avoided what would have been devastating news today, as first quarter growth of 0.3pc was reported, and a triple-dip recession avoided. A recession is confirmed when the economy experiences two consecutive periods of decline, and after a final quarter of 2012 growth figure of -0.3pc, any further decline would have officially seen the economy back in recession. The growth figure is also better than expected. Many predictions from politicians and journalists yesterday didn’t rise over 0.1pc, while there were those who thought the economy would certainly enter into another period of recession. The UK is still to start a proper recovery from the drastic economic..

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Computer systems fail at Nationwide

Nationwide has become the latest financial organisation to suffer a system failure, which has meant customers are unable to access online banking as well as account details in branches. The building society has apologised to customers who have been affected and said it will look to sort the problem out as quickly as possible. This is not the first time that customers of Nationwide have had to endure a failure in the electronic systems, and last July an error led to double payments being taken from hundreds of thousands of account holders making electronic payments. Although Nationwide said that particular situation was caused by ‘one-off’ human error, customers will be..

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FCA could probe ‘teaser’ rates

The Financial Conduct Authority (FCA) has hinted that it could launch an investigation into ‘teaser’ rates which could lead to action being taken against companies who mislead consumers. Teaser rates are those that lure customers to a product, such as a cash Isa, with higher initial interest rates. However these are only introductory rates, sometimes containing a first year bonus, and will drop off again after the first twelve months, sometimes to as little as 0.1pc. This has led to a great deal of criticism from consumer groups, as well as one of the new high street banks, who say there should be more transparency and honesty from providers as to what the consumer is actually..

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UK Unemployment hits 2.56 million

The amount of people unemployed in the UK rose by 70,000 between December and February according to the Office for National Statistics (ONS). The number of people employed in the UK also fell, meaning the unemployment rate currently stands at 7.9pc, raising further serious questions about the economic state of the UK. However the number of people claiming Jobseekers Allowance fell last month by 7,000, to 1.3m. Other statistics make for grim reading too, with the ONS revealing that there are now 900,000 people who have been without a job for a year or more, an increase of 8,000 on the previous quarter. The number of people aged 16-24 who are unemployed rose too, by some 20,000, meaning..

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More people set to ditch bank after poor treatment

A study from Which? has revealed that record numbers of people are expected turn their back on their bank in the coming year, as consumers become more fed up with how they are being treated. More than a quarter of people have admitted they have had a problem with their current account, while a fifth of people who went on to make a complaint to their bank said it was not resolved satisfactorily. Consumer confidence has been affected by a succession of scandals over the last few years, with the mis-selling of products and serious system failure just a couple of examples in a series of incidents. High street chains are now starting to offer consumers an alternative to their bank,..

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First time buyers reach 5 year peak

25pc misplace pension ‘job-hopping’

One in four people say that they have lost touch with or misplaced a pension pot after changing their job. A change in job culture means that more and more people are changing jobs more regularly, and this causes confusion over pension schemes, especially when they are not transferred to the new company they work for. Half of all missing pensions are forgotten about, while missing paperwork accounts for the loss of a further 20pc, according to data from the charity Age UK. While those aged over 65 have worked for an average of five to six companies, a change in job culture now means that one in four people aged 25 to 34 has had the same amount of jobs. On top of this more people..

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