Podcast Summary
Unlocking Top Talent on LinkedIn, Finding the Best Savings Rates: LinkedIn is essential for small business hiring, as 70% of users don't visit other job sites. In finance, finding the best savings rates requires diligence and flexibility, and current deals include 0.65% for instant access and 6.9% for fixed rates from Northern Rock.
LinkedIn is a valuable resource for small businesses looking to hire top talent. With over 70% of LinkedIn users not visiting other leading job sites, great candidates like Sandra might be missed if a business isn't using LinkedIn for recruitment. Meanwhile, in the world of finance, interest rate cuts are making it a challenging time for savers. However, there are still decent savings rates to be found if one keeps an eye on the latest deals and is prepared to shift providers. For instance, an instant access savings account with a rate of 0.65% and a fixed rate bond with a rate of 6.9% from Northern Rock are currently available. Despite Northern Rock's past difficulties, the high rates make it an attractive option for those looking to maximize their savings returns. In summary, LinkedIn is a hidden gem for hiring professionals, and in the current economic climate, it takes diligence and flexibility to find the best savings rates.
Northern Rock's Competitive Savings Account with Flexibility: Northern Rock's 1-year fixed savings account offers a competitive rate and allows early withdrawal, but consider potential risks. Diversify savings and protect up to £35,000 with increased deposit protection.
Northern Rock's 1-year fixed savings account offers a competitive interest rate, even with the possibility of early withdrawal. Despite the government's guarantee, it's crucial to consider the potential risks, such as temporary account freezes in extreme situations. The increase in deposit protection up to £35,000 also applies to Northern Rock. While the housing market may be less attractive for buy-to-let investors due to weakening property prices, this could stimulate the rented sector. Overall, it's essential to diversify savings and not put all eggs in one basket. For more details on Northern Rock's savings account, tune in to Steve's deal of the week on FT Money.
Softening housing market in southern UK, particularly London: First-time buyers, investors can find deals amidst softening prices. High demand areas maintain value. Rents rising, demand for rentals high. Significant capital needed for entry due to tight mortgage market. Market adjusting, return to flexible lending uncertain.
The housing market in the southern counties of the UK, particularly in London, is experiencing a softening of prices due to decreasing buyer confidence and caution. However, properties in high demand areas with limited supply are still holding their value. This market trend is good news for first-time buyers and buy-to-let investors, as there are opportunities for good deals. The fundamentals for buy-to-let investors are looking good, with rents rising and demand for rental properties remaining high due to an increasing number of students and migrant workers. However, entering the market now requires a significant amount of capital due to the tightening mortgage market. Overall, the housing market is experiencing a period of adjustment, and it may be some time before we see a return to the more flexible lending conditions of the recent past.
Potential Increase in Rental Yields for Landlords in 2008: Experts predict rental yields could reach or surpass 6%, driven by high demand for lettings due to various factors and falling interest rates.
2008 could be an intriguing year for landlords due to falling interest rates and rising rents. Mark Anderson of Hamptons International noted that while stricter mortgage criteria exist, rental yields could potentially increase. Charlene discussed the high demand for lettings as a result of various factors, including people selling and renting, first-time buyers delaying purchases, and an influx of foreign workers. Some experts predict rental yields could reach or surpass 6%, but skepticism exists regarding the accuracy of such projections. Despite this, Steve believes there's still significant demand for buy-to-let properties and investors should consider the potential rewards and challenges of being a landlord.
Buy-to-let market: Investing in properties during economic downturns: Investing in buy-to-let properties during economic downturns can provide potential bargains, but risks include a housing market bubble and decreasing rents or capital value losses. Strong rental demand from growing student and migrant populations makes it a worthwhile investment, but consider if rental income outweighs potential loss of capital value.
The buy-to-let market plays a significant role in the housing market, particularly during economic downturns when repossessions increase. Buy-to-let investors are often the ones snapping up these properties at auctions, creating a potential bargain for them. However, there is a risk involved, as there's a possibility of a housing market bubble, which could lead to decreasing rents or capital value losses. Despite this, rental demand remains strong due to growing student and migrant populations, making it a worthwhile investment for many. It's essential to consider whether the rental income outweighs the potential loss of capital value. Additionally, for those who don't want to commit to buying an annuity right away, income drawdown might be an alternative solution for pension income.
Choosing Between Annuities and Income Drawdown in Retirement: Considering both short-term and long-term market volatility, retirees can choose between annuities for guaranteed income or income drawdown for potential investment returns, while maintaining some financial security. A well-diversified investment portfolio is crucial.
As people retire, they have the option to choose between an annuity and income drawdown. Annuities provide a guaranteed income for life, but enhanced annuities, which offer higher payouts for those with certain medical conditions, can result in poorer payouts for others. Income drawdown, on the other hand, allows individuals to invest their pension pot and draw an income from it, while avoiding large taxes upon death. However, this comes with the risk of market volatility, leaving retirees with insufficient income in their old age. Therefore, it's essential to have a well-diversified investment portfolio, including equities, cash, fixed interest, and property investments. Some retirees opt for a balance between annuities and income drawdown, allowing them to enjoy potential investment returns while maintaining some financial security. Nigel Callahan of Hargreaves Lansdowne emphasizes the importance of considering both short-term and long-term market volatility when planning retirement income.
Balancing risk and income in retirement: During retirement, carefully balancing asset allocation and income sources is essential for preserving capital and generating sustainable income. A well-diversified portfolio and adjusting investments based on age can help mitigate risk. Be aware of potential risks like outliving savings or market volatility.
During retirement, particularly during income drawdown, careful consideration of both timing and asset allocation is crucial for preserving capital and generating sustainable income. The risk of investing solely in equities and drawing an income can result in a depleted fund, leaving retirees with insufficient resources to cover their expenses. A well-diversified portfolio with a balance between safe investments and equities, adjusted according to age, can help mitigate this risk. Additionally, mixing and matching sources of income, such as a state pension, final salary pension, and income drawdown, can provide a more stable financial situation in retirement. However, even with careful planning, retirees should be aware of the potential risks associated with income drawdown, such as the possibility of outliving their savings or experiencing market volatility.
Friends Provident and Standard Life's Shares Underperform Amidst Failed Mergers and Acquisitions: Friends Provident and Standard Life's shares have underperformed due to failed mergers and acquisitions, causing investor confidence to wane. The future outcome depends on the terms of potential deals.
Friends Provident and Standard Life, two widely held shares among private investors due to their demutualizations, have seen their shares perform poorly in recent years. Friends Provident announced a strategic review to sell off its foreign and colonial asset management business, following a failed merger with Resolution and Standard Life's attempted acquisition. The news was met with a lackluster market reaction, with Friends Provident shares falling 10% immediately. Standard Life shares have also taken a hit, falling nearly 40% since peaking in summer 2021. The failed bid for Resolution and the murky world of financial services mergers and acquisitions have shaken investor confidence in both companies. There is speculation that Standard Life may now bid for Friends Provident, but the outcome would depend on the terms of the deal. The opaque nature of the life insurance industry and the cannibalization of products among competitors add to the complexity for policyholders with with-profits endowments or pensions.
Decreasing returns in life assurance sector: The life assurance sector, particularly profits endowments and pensions, is experiencing decreasing returns for policyholders and shareholders. Popularity of these policies has waned due to the declining returns, with annual bonus announcements not impressing despite market downturns.
The life assurance sector, particularly with profits endowments and pensions, is not providing impressive returns for policyholders or shareholders in the current market conditions. The overall returns on these policies have been decreasing, and annual bonus announcements may not impress despite last year's market downturn. People typically bought these policies for house purchases and pensions in the 1980s, but their popularity has waned due to the declining returns. The sector as a whole is facing a mix of bad news and limited respite. For more analysis, check out Steve's article in FT Money on February 2nd. Remember, you can email your views and questions to ask.ftyourmoney@ft.com, and we'll be back next week with another financial update. At Reward Gateway Edenred, we believe that appreciation is valuable. It starts with people, boosts companies, and enhances overall performance and productivity. Discover the power of appreciation with our total employee experience platform. While being a little extra is usually unnecessary, it's essential when it comes to healthcare. UnitedHealthcare's Health ProtectorGuard fixed indemnity insurance plans, underwritten by Golden Rule Insurance Company, help manage out-of-pocket costs and supplement your primary plan. Learn more at uhone.com.
