Podcast Summary
Consider long-term costs when making significant purchases: When buying a custom ring or a listed building, factor in hidden expenses and requirements for a satisfying and financially sound decision
When it comes to making significant purchases, such as a unique engagement ring or a new home, careful consideration and planning are crucial. For instance, at Blue Nile.com, you can design a custom ring with ease and convenience, but ensure you're satisfied with your choice before finalizing the purchase. Meanwhile, when it comes to buying a listed building, be aware of the additional costs and regulations. These can include higher insurance premiums, increased running costs, and the need for specialized materials and craftsmen to maintain the building's authenticity. These hidden expenses can add up and potentially outweigh the romanticized appeal of owning a period property. So, whether you're shopping for a ring or a home, always factor in the long-term costs and requirements before making your purchase. And remember, Blue Nile listeners can enjoy a discount with promo code 'listen'. Lastly, for those considering retirement, keep an eye on pension-related news from the Conservative Party Conference. Our pensions correspondent, Josephine Cumbo, will provide updates on any developments.
Significant additional costs for listed properties: Listed properties bring extra expenses like higher insurance, energy inefficiency, unauthorized alterations' liabilities, and VAT on alterations since 2012. But, lower VAT rates apply in some cases like converting a barn or office to a home.
Buying and maintaining a listed property comes with significant additional costs compared to a regular property. These costs include higher insurance premiums, increased running costs due to energy inefficiency, potential liabilities for previous owners' unauthorized alterations, and the addition of VAT to alteration costs since 2012. These expenses can be a challenge, especially for those in lower socioeconomic classes, contradicting the common perception of listed property owners as wealthy aristocrats. However, there are some circumstances where a lower VAT rate of 5% can apply, such as converting a barn or office to a home, changing the number of dwellings within a property, or leaving a property empty for two years to regenerate high streets.
Stamp Duty Love Tax: Unexpected Challenges for Couples Remortgaging Together: Couples remortgaging together may face unexpected stamp duty land tax costs if both partners need to be added to the property deeds.
Stamp duty land tax can pose unexpected challenges for couples who decide to remortgage their homes together, even if only one partner initially owns the property. This issue, which Paul Lewis refers to as the "stamp duty love tax," can create complications and additional costs when both partners need to be added to the deeds in order to secure a mortgage. For instance, a couple, Stuart and Ellie, from Leeds encountered a surprise tax bill of nearly £1,500 when they tried to remortgage their home and Ellie was added to the deeds due to the mortgage lender's requirements. This situation highlights the importance of understanding the potential financial implications of remortgaging and the impact of stamp duty land tax on blended families or couples who own multiple properties.
Unexpected Stamp Duty Land Tax Charge for Homeowner: A woman was unexpectedly charged with stamp duty land tax despite not purchasing an additional property, due to remortgaging her home and her share of the mortgage debt.
A woman was unexpectedly hit with a significant stamp duty land tax bill despite not actually purchasing an additional property. This occurred when she and her husband remortgaged their home, resulting in her being charged based on her share of the mortgage debt. The tax is intended to discourage multiple property ownership, but in this case, no extra property was involved. The tax is payable on the consideration, which in this instance was her share of the mortgage debt, even though she wasn't paying anything new. If the mortgage amount had been less than £80,000, she would not have had to pay this additional tax. The couple is considering switching to a lender that allows one spouse to be the owner and borrower, but these lenders may not offer the best value. The situation is seen as unfair, as no property was changing hands and no first-time buyer was being denied a home. The new chancellor, Philip Hammond, and pensions minister, Richard Harrington, will be presiding over November's autumn statement, and it remains to be seen if they will address this issue.
Government's commitment to maintaining triple lock on state pension: The Conservative Party conference emphasized the government's promise to uphold the triple lock on state pensions, ensuring it increases by the greater of 2.5% earnings or inflation, until the next election. Additionally, a business champion for older workers was appointed to encourage employment of older individuals.
Key takeaway from the Conservative Party conference discussion on pensions is the government's commitment to maintaining the triple lock on the state pension, ensuring it rises by the greater of 2.5% earnings or inflation, until the next election. Additionally, Damian Green announced a business champion for older workers, Andy Briggs of Aviva UK, to promote the employment of older individuals. However, concerns were raised on the fringes of the conference about the poor take-up of pension advice post-pension freedoms, leading to suggestions that it should be made compulsory. Another topic of debate was potential reforms to pension tax relief, with the government yet to provide a clear direction on future plans. Overall, the conference highlighted the need for greater support and education for individuals navigating their pension options.
Providing Security and Flexibility in Retirement: NEST proposes a retirement income blueprint with a flexible income in early years, rainy day fund, and later life protected income to address savers' desire for security and flexibility.
While savers value the freedom and flexibility of managing their retirement income, they are apprehensive about making the wrong decisions. Many savers cannot afford or do not want advice, yet they feel incapable of making informed decisions on their own. These individuals desire a secure income, but also want the ability to access their savings for unexpected expenses. The retirement income blueprint proposed by NEST aims to address this issue by offering a flexible income in the early years, a rainy day fund, and a later life protected income. The governance body determines the sustainable income level, taking the burden off individuals. However, the implementation of this solution requires political approval. In essence, the challenge is to provide savers with the security they crave while allowing them the flexibility they desire.
NEST's Role in Retirement Solutions Expansion: NEST, a retirement savings provider, is considering expanding its role to facilitate an easy retirement transition following the end of compulsory annuitization, as part of the DWP's consultation on its future role.
NEST, a leading retirement savings provider in the UK, is currently considering expanding its role in retirement solutions following the end of compulsory annuitization. The company, which initially offered an annuity panel and now provides access to the open market, believes it's essential to facilitate an easy transition into retirement for people. NEST is participating in the DWP's consultation on its future role, with the call for evidence closing today. The mission of NEST to help millions of people have a good retirement remains unchanged, but the retirement landscape has evolved, requiring adaptability from providers like NEST.
