Podcast Summary
Finding Hidden Talent on LinkedIn: 70% of LinkedIn users don't use other job sites, making it a crucial platform for small businesses to discover potential candidates, even those not actively seeking new jobs.
LinkedIn is a valuable resource for small businesses looking to hire top talent. Sandra, a potential candidate, emphasized that professionals not actively seeking new jobs can still be found on LinkedIn. In fact, over 70% of LinkedIn users don't visit other leading job sites, making it an essential platform for recruitment. Meanwhile, in the world of finance, mergers among building societies could impact savers and borrowers. Although there's no immediate cause for concern, consolidation may limit opportunities for windfalls. The situation is still unfolding, and the full implications remain to be seen. However, it's worth noting that some smaller building societies are reportedly struggling to maintain their finances. Overall, these developments underscore the importance of staying informed about economic trends and being proactive in seeking opportunities. For businesses, this means utilizing LinkedIn for hiring, and for individuals, it may mean diversifying savings or considering alternative sources of income.
Impact of credit crisis on building societies: Building societies, focused on individual lending, struggle with low interest rates and profitability, leading to mergers, takeovers, and restructurings. Savers and PIBS holders fear potential interest rate cuts and erosion of mutual model's core principle.
Building societies, unlike banks, have been impacted differently by the credit crisis due to their focus on lending to individuals and their struggle with low interest rates. This has led to challenges for societies like Stratus Wyndham, where a large percentage of borrowers are on low-interest tracker rates, making it difficult for them to generate profits. The sector has already seen several mergers, takeovers, and restructurings, such as the West Bromwich Building Society's quasi-demutualization, which involved issuing profit-participating deferred shares to institutional investors. This has raised concerns for savers and holders of permanent interest bearing shares (PIBS), as they fear potential interest rate cuts and the erosion of the mutual model's core principle of putting savers and borrowers first. The uncertainty surrounding these events could negatively impact the PIBs market. Overall, the building society sector's future remains uncertain, with potential implications for both savers and borrowers.
UK Retirement Age Debate: Default vs. Pension Age: The UK may raise retirement age due to pension funding crisis. Default retirement age is when employers can force retirement, while pension age is when individuals can take benefits. Save adequately for retirement, as state benefits are less generous and people live longer. Retirement age change must have a legitimate aim.
The retirement age may be raised in the UK due to pension funding crisis, but the default retirement age and pension age are not the same. The default retirement age is when an employer can force an employee to retire, currently at 65 in the UK. However, individuals can take retirement benefits from their personal schemes or personal contracts as early as 55. The debate about retirement age arises due to funding shortfalls in both employer schemes and individual pensions. People are advised to save adequately for retirement as state pension benefits are not as generous as before and people are living longer. The European Court of Justice has also ruled that an enforceable retirement age can only remain if it has a legitimate aim linked to social or employment policy. So, it's essential to plan for retirement carefully, considering all these factors.
Preparing for longer working years and flexibility in pension planning: Individuals may need to work longer and accept lower retirement income. Flexible pension schemes like SIPPs offer the most adaptability, but require additional funds and professional advice.
Individuals need to be prepared for the possibility of longer working years or accepting lower retirement income, and therefore, greater flexibility in pension planning arrangements is essential. Traditional retirement patterns are disappearing, and people are transitioning into retirement gradually, requiring schemes that can accommodate part-time work or income drawdowns. Self-Invested Personal Pensions (SIPs) offer the most flexibility, but they also come with more options and complications, necessitating additional funds and professional advice. For those in defined benefit schemes, it may not be worthwhile to transfer to a SIP before retirement, but the added flexibility they provide is desirable. As an industry and with the government, we need to encourage more flexibility in all types of pension schemes. Additionally, recent indications suggest that annuity incomes may also decrease.
Consider multiple sources for retirement income: Pensions remain important, but people should explore other ways like ISAs, property, and flexible pension arrangements to secure retirement income due to potential changes in annuity rates and EU rules.
Pensions, while a valuable part of retirement income, may not be the sole solution due to potential lower annuity rates and changes in EU rules. People should consider a variety of ways to generate retirement income, including ISAs, property, and pensions. Pensions, with their tax relief, remain a crucial component of a well-rounded retirement plan. Regarding annuities, with people living longer and EU rules likely to decrease annuity rates, individuals may receive less income each year. Lenders have also become less willing to consider bonuses when determining mortgage eligibility and loan amounts. The default retirement age may also be abolished, allowing individuals to work as long as they want or need to. Flexibility in pension arrangements will be essential in the future.
Mortgage market challenges for those with bonus income: Lenders are scrutinizing bonus and commission income, making it difficult for some individuals to secure enough borrowing power to purchase homes. Private banks, offering bespoke lending solutions, are more amenable to considering bonus income and seeing increased demand.
The mortgage market is becoming more challenging for those whose income comes from sources other than a guaranteed basic salary. Bonuses and commissions, common in various industries like real estate and recruitment, are being scrutinized by lenders due to their uncertainty. This has made it difficult for many individuals to secure enough borrowing power to purchase the homes they need. Mortgage brokers anticipate that lenders will gradually relax their criteria as they gain confidence in the reliability of bonuses. However, private banks, which offer more bespoke lending solutions, have been more amenable to considering bonus income and are seeing increased demand from clients unable to secure mortgages elsewhere. This trend allows private banks to build relationships and gain control over their clients' assets. For those who cannot transfer all their investments to a private bank but still rely on commission income, this presents a significant challenge.
Researching Accommodating Lenders for Non-Traditional Income Sources: When struggling to secure a loan due to non-traditional income, research lenders known for their accommodating policies to increase chances of approval.
While some banks may consider bonuses and commissions when evaluating loan applications, not all do. For those who may struggle to obtain finance due to their income sources, it's essential to research which lenders are more accommodating. This information can be found in Charlene's upcoming article in FT Money. It's important to note that not everyone will qualify for these types of loans, and they're not exclusive to the super wealthy. Additionally, Mother's Day is coming up, and if you're looking for a thoughtful gift, consider checking out 1 800 Flowers for handmade bouquets, sweet treats, gourmet food, and one-of-a-kind gifts. And if you're in the market for high-quality fashion at affordable prices, Quince is an excellent option, offering luxury essentials at 50-80% less than similar brands while prioritizing safe, ethical, and responsible manufacturing.
