Podcast Summary
LinkedIn: A Hiring Resource for Small Businesses, Sleep Number: Customized Comfort, Mortgage Market: New Opportunities for Older Borrowers: LinkedIn offers small businesses access to a large pool of potential candidates and is a popular choice for professionals. The Sleep Number smart bed provides customized comfort for individuals. Recent changes in the mortgage market allow older borrowers to take out conventional mortgages, opening up new possibilities.
LinkedIn is a valuable resource for small businesses looking to hire professionals. It offers access to a large pool of potential candidates, including those not actively seeking new jobs. In contrast, over 70% of LinkedIn users don't visit other leading job sites. Furthermore, in the world of sleep, the Sleep Number smart bed provides customized comfort for individuals, making it a top choice according to J.D. Power. Regarding the mortgage market, recent changes by Halifax and Nationwide to lift age limits for mortgage repayment have opened up new possibilities for older borrowers. However, it remains to be seen whether these changes will lead more elderly borrowers to opt for conventional mortgages instead of equity release.
New mortgage options for older borrowers: Nationwide and Halifax offer mortgage options for retirees, considering income in retirement and affordability. Conventional mortgages may be cheaper, but equity release mortgages allow access to property equity without selling or telling family.
Older borrowers, specifically those over retirement age, now have more mortgage options thanks to Nationwide and Halifax's new lending policies. These lenders previously required mortgages to be paid off by retirement age, but they now consider borrowers' income in retirement and the affordability of the mortgage. A conventional mortgage could be a cheaper option for older borrowers who can afford the repayments and have a suitable repayment strategy in place. However, equity release mortgages may still be suitable for older borrowers without an income or a means of repayment. While equity release mortgages can be more expensive, they allow borrowers to access the equity in their property without having to sell it or tell their children. It's essential to consult a mortgage intermediary to determine the best route forward based on individual circumstances.
Consider family involvement in equity release decisions, be cautious with negative yielding bonds: Borrowers should involve family in equity release decisions, investors need to be cautious with negative yielding bonds, ethical bond funds could be a safer alternative for fixed income exposure
When it comes to equity release mortgages, it's important for borrowers to consider involving their family members in the decision-making process, even though it's ultimately their choice. On the other hand, in the bond market, investors are urged to be cautious due to the topsy-turvy consequences of negative yielding bonds, which can actually erode wealth instead of preserving it. Despite these concerns, investors continue to pile into bonds, including UK gilts, and are looking to the riskier end of the fixed income spectrum for higher yields. Ethical bond funds, which only invest in investment-grade corporate bonds, could be a safer alternative for fixed income exposure. Overall, it's essential for investors to be aware of the current market conditions and make informed decisions based on their individual financial situations.
Ethical bond funds offer attractive yields compared to low-interest rates: Ethical bond funds can yield 5-7%, doubling investments in 14.5 years, while cash takes 144 years at 0.5%.
Ethical investing through bond funds, like the Rathbone Ethical Bond Fund, can offer attractive yields, even in a low-interest environment. For instance, this fund has had a yield target of 5-7% since 2002, which is significant when compared to the current bank rate of 0.5%. Using the rule of 72, it would take 14.5 years to double your investment with a 5% yield, making it a more viable option than cash, which would take 144 years to double at the current interest rate. However, the UK's Competition and Markets Authority (CMA) recently announced that there's no need for significant changes in the current account and small business banking market. Despite concerns that the free banking model might end, the CMA instead focused on making charges and fees clearer for customers. This means that while ethical investing can provide better returns, customers need to be aware of the hidden fees and charges associated with their current accounts. The CMA's findings might not lead to a radical shake-up of the banking sector, but increased transparency could help consumers make more informed decisions.
CMA Proposes Measures to Increase Competition and Transparency in Retail Banking: The CMA proposed measures include allowing banks to set their own maximum charges for unarranged overdrafts, requiring alerts for customers nearing overdraft limits, and pushing for online comparison sites and open APIs, which are expected to save current account holders £1 billion over five years.
The UK's Competition and Markets Authority (CMA) recently released its long-awaited report on the retail banking sector, and while some had hoped for more radical changes, the CMA ultimately stopped short of ending free and credit banking or breaking up the big banks. Instead, the CMA proposed several remedies aimed at increasing competition and transparency, including allowing individual banks to set their own maximum charges for unarranged overdrafts, requiring alerts for customers nearing their overdraft limits, and pushing for the development of online comparison sites and open APIs. Critics argue that these measures don't go far enough, but the CMA believes they will lead to savings of £1 billion for current account holders over five years. Despite the controversy, shares in the UK's big four banks rallied following the report.
Stay informed and proactive with your money: Consider switching current accounts and equity release, read personal finance columns, and utilize resources like UnitedHealthcare's Health ProtectorGuard plans and stamps.com for business efficiency.
Learning from the discussion on FT Money is the importance of being informed and proactive when it comes to managing your money. Emma Dunkley discussed issues with current accounts and equity release, encouraging listeners to consider switching and providing resources to do so. The show also featured columns on personal finance and the Queen's financial legacy, as well as share tips and directors deals. Additionally, sponsor messages highlighted the benefits of supplemental health insurance with UnitedHealthcare's Health ProtectorGuard plans and the convenience of stamps.com for business mailing needs. These messages emphasized the importance of being "extra" in certain areas, such as health care and business efficiency, to ensure peace of mind and financial security. Listeners were encouraged to engage with the show by sharing their thoughts on money matters through email, social media, or commenting on articles on the FT Money website. Overall, the message was to stay informed, make smart decisions, and take advantage of resources to help manage your money effectively.