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Newsletter – September 2016

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Financial fraud incidents up 53% in first half of 2016

More than 1 million incidents of financial fraud occurred in the first six months of 2016, according to official figures released by Financial Fraud Action UK (FFA UK).

This represents a 53% increase compared to the same period last year, this means an incident happened in the UK every 15 seconds between January and June 2016.

The figures are released as FFA UK and all major banks and key financial services providers across the UK come together for the first time to launch a national campaign to combat financial fraud. The campaign – Take Five – aims to put consumers and businesses back in control with straight forward advice to help prevent financial fraud.

It focuses on financial frauds directly targeting customers, such as email deception (known as phishing) and phone and text-based scams (sometimes known as vishing and smishing), and is designed to remind people that it pays to stop and think. It will also help protect people from criminals duping them into moving money into bank accounts controlled by the fraudsters.

The Take Five campaign is asking consumers to help protect themselves from financial fraud by remembering some simple advice:

  1. Never disclose security details, such as your PIN or full password – it’s never right to reveal these details
  2. Don’t assume an email request or caller is genuine – people aren’t always who they say they are
  3. Don’t be rushed – a bank or genuine organisation won’t mind waiting to give you time to stop and think
  4. Listen to your instincts – if something feels wrong then it is usually right to pause and question it
  5. Stay in control – have the confidence to refuse unusual requests for information

Backing the campaign, Ian Dyson, Commissioner, City of London Police, which is the national policing lead for fraud said: “Fraud and cyber crime account for nearly half of all crime according to the British Crime Survey and this campaign is aimed at giving people the confidence to think before they act. Pausing for that short moment and asking ourselves, is this the safe thing to do, will go a long way to thwarting the fraudsters that prey on peoples trusting nature. This campaign is one element of the Joint Fraud Taskforce bringing together law enforcement, Government and business to tackle the increase in crime that blights every community across the country.”

If you have been affected by this, or any other scam, report it to Action Fraud by calling
0300 123 2040, or by using the online reporting tool at www.actionfraud.police.uk

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The cost of care

It has been reported that the average annual care home fee is now in excess of £30,000 – way beyond what the average pensioner can realistically expect to receive (which is actually about £14,456!). The average length of stay in a care home is 2.5 years. Therefore £75,000 is needed to cover the total costs, and for most this is just not feasible.

The rise in fees has been attributed to the increase in the wages of the care workers and nurses who staff the care homes, something that cannot really be avoided. The cuts to social care have added increased pressure on those needing care to meet the payments themselves, as resources and funding are reduced by the state. Basically we are all living far too long for the government to be able to afford to look after us.
Looking after you is the number one priority, and so having a plan on how to fund long-term care is a necessity. If you aren’t already putting money aside for this then you need to be! The majority of you reading this will not be entitled to state help because you have far too much money! So, make sure you don’t eat away at what you have carefully ring-fenced for your family, and start thinking about what you may or may not need in the future.

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Lifetime ISA – revisited

You may recall we sent out a budget summary earlier in the year that included the Lifetime ISA (LISA). To recap the details, this is an ISA for those under 40 years of age and can only be used for retirement (after the age of 60), or for the purchase of a first home. The LISA offers a 25% bonus on savings up to a maximum of £4,000 per year. In some ways it is similar to the Help to Buy ISA, which is now available for first-time buyers and which also offers a 25% bonus on savings up to £3,400 in the first year and £2,400 each following year.

The LISA is not intended to replace the pension by any means, but it could offer a useful holding account for those who have maximised their annual pension allowances or those who want a guaranteed amount of growth per year on a small cash holding. The tax relief on pensions still outweighs the benefits of the LISA, especially for higher or additional rate tax payers, who receive 40% or 45%, respectively, on contributions, whilst basic rate tax payers still get 20%. You can only invest a maximum of £4,000 into the LISA per year, but by investing the maximum you will receive £1,000 for basically doing nothing other than giving them your money – not bad really!
The LISA may be particularly useful for anyone trying to buy their first home. You can hold one LISA per person and a couple can use more than one for a first-time house purchase if buying a house together, so in a year you can save £8,000 between you and have this topped up to £10,000 by the government.
The LISA is due to come into play in April 2017 but the big market providers are concerned about the mechanics of how the product will work and this has slowed approval for the launch of the LISA. Standard Life has already said they will delay the launch of the LISA on their platform until 2018 when all of the details have been clarified, but the Treasury are standing firm and saying it will definitely be with us by April 2017.

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University fees hit the roof

So university fees seem to be going in only one direction … and that’s up!

From September 2017 fees will rise to £9,250 per year, and that is purely for the education element of the experience – it does not include the cost of living per student per year. So before considering how they will maintain themselves, a student on a three-year course is already in £27,750 of debt.
Maintenance loans are means tested, but currently stand at a maximum of £8,430 per year outside of London and £11,002 in London itself. So, for the full shebang over three years you are looking at a total £53,040 for universities outside of London and a staggering £60,756 in London.
Now, it used to be that those already enrolled were not subject to the annual increases, but news reports back in July suggested that existing students will also be subject to the increase in fees. A bit of a liberty really!
The tuition and maintenance loans start to be repaid when the student earns above £21,000 and are subject to inflation as well as a maximum of 3% interest.
Today, your children’s education is just one more thing to start saving towards, so if you want to put money aside for future education needs and have it protected, then please get in touch with us to see what we can do to help you.

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