If you’re searching for a new mortgage, you could have more options than you expect. While it may present an opportunity to secure a competitive deal, it might also be overwhelming. Read on to find out how you could effectively narrow down your choices.

According to Moneyfacts, the number of mortgage deals on offer increased for the sixth consecutive month in January 2024. In fact, there were almost 5,900 options – the last time there were more deals available was in 2008.

So, how do you figure out which mortgage deal is right for you? Here are five steps that could help.

1. Decide if you’d prefer a fixed- or variable-rate mortgage

Understanding what type of mortgage you want could help you remove the options that don’t suit your needs. One of the key factors to consider is whether a fixed- or variable-rate mortgage would be right for you. 

The interest rate on a fixed-rate option will remain the same throughout the deal. This may be a good option if you’re worried about interest rates rising or would like peace of mind knowing how much your repayments would be each month. However, if interest rates fell, you could end up paying more interest overall when compared to a variable-rate option.

In contrast, the interest rate on a variable-rate mortgage deal can rise or fall depending on interest rates at the time. So, if interest rates fell, you could benefit financially. However, if rates increased, your repayments would also rise. 

The good news is that after two years of interest rates climbing, the figures from Moneyfacts suggest they are starting to fall. In January, the interest rate for both average fixed- and variable-rate mortgage deals fell when compared to just a month earlier. 

2. Set out how long you want your mortgage deal to last for

A mortgage deal will last for a defined period, often two, three, five, or 10 years.

When choosing which length suits you, considering your long-term plans might be useful. For example, if you plan to move within the next few years, a shorter deal could make more sense and allow you to avoid an early repayment fee. 

Remember, when your existing mortgage deal ends, you’ll usually be moved on to your lender’s standard variable rate (SVR), which often isn’t competitive. 

Making a note of when your deal will run out could help you avoid paying a higher interest rate than you need to. You can usually lock in a new mortgage deal six months before your current one expires. 

3. Calculate how much you want to borrow

Setting out how much you want to borrow could be essential when comparing different lenders. 

If you’re a first-time buyer, you’ll usually take out a 90% mortgage, but some options could allow you to get on the property ladder with a smaller deposit. Understanding how much you’re likely to be able to borrow is useful before you apply for a mortgage. We could offer support here and help you apply for an agreement in principle. 

For existing homeowners, you might want to increase how much you borrow through your mortgage to fund a home renovation project or other plans. Alternatively, you might have a lump sum that you want to use to pay down your mortgage debt, which could help you secure a more competitive deal and reduce the amount of interest you pay. 

4. List any features you want your mortgage to have

The interest rate you pay is undoubtedly an important part of choosing a mortgage, but it might not be the only feature you want to consider.

For instance, if you hope to repay your mortgage sooner by overpaying, choosing a mortgage that allows this without a fee could be valuable. Or being able to port your mortgage may be useful if you’re thinking about moving in the short term. 

5. Contact a mortgage broker

There are a lot of mortgage lenders to choose from, including some that don’t have a high street presence so you may not have heard of them. As a result, it can be difficult to navigate the mortgage market on your own, even after you’ve narrowed down what you’re looking for. 

It can be especially challenging when you consider that the average shelf-life of a mortgage product was just three weeks in January 2024. So, the deals on offer are frequently changing. 

A mortgage broker could offer invaluable expertise when you’re searching for a new deal, whether you’re a first-time buyer or would like to remortgage.

We can help you understand which mortgage options suit your needs, as well as which lenders are more likely to accept your application. We can also offer guidance throughout the process, such as support when you’re filling in paperwork, which could help you minimise delays.

Please contact us to talk about how we could help you find a mortgage. 

Please note: This blog is for information purposes and does not constitute financial advice, which should be based on your individual circumstances The information is aimed at retail clients only.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Managing your finances effectively as a couple could provide you with peace of mind and mean you’re more likely to reach your goals. Yet, it can be difficult as you could have very different financial priorities to your partner. Read on to discover five handy tips that could help you build a financial plan that suits both of you. 

1. Set shared goals you can work towards

Having shared goals you’re working towards as a couple can help ensure you’re both on the same page and understand why you’re making certain financial decisions.

For example, if you both want to retire early, you might decide to increase pension contributions. Without a reason, potentially reducing your disposable income now could be difficult to stick to. 

However, with a long-term view of how cutting back now could mean you have more freedom in the future, you may find you’re in a better position to be successful.

2. Understand your partner’s attitude to money 

One of the biggest challenges of managing finances with a partner is that you could have very different views about money.

Perhaps you’re a saver who feels more comfortable when you add to your emergency fund, while your partner is more likely to splurge on a treat. Or, when it comes to investing, one of you is more risk averse than the other. 

Understanding your partner’s approach to managing assets and their long-term financial outlook could help you strike a balance that means you both feel confident about your finances. 

3. Make your financial plan part of your conversations 

Finances play a crucial role in day-to-day life and your long-term security, from managing household bills to preparing for retirement. Yet, it’s a topic many couples avoid talking about and, for some, when they do, it can cause conflict.

According to a survey from Aviva, a quarter of couples argue about money at least once a week, and 5% said they bickered about finances every day. 

Making money part of your conversations could improve communication as you have more opportunities to address small disagreements before they possibly become larger issues. 

4. Be clear about how you’ll manage assets together and individually  

You don’t need to inform your partner of every purchase you make or share all your assets to create an effective financial plan as a couple. However, understanding and talking about how you’ll share assets and financial responsibility is often important.

Worryingly, a survey from Starling Bank found that almost a quarter of married couples and 30% of people in a committed relationship said they keep financial secrets from their partner.

Some secrets may be harmless, such as having a nest egg in case of emergency, but others could potentially negatively affect your financial security. For example, a fifth of those with a financial secret said they are hiding debt from their partner, and 16% are concealing loss of money, such as through gambling or poor investments. 

Being open about money and setting out how you’ll manage assets together or individually could ensure you're both on the same page and avoid potential conflicts related to financial secrets. 

What’s important is that you find a way to manage assets in a way that suits you and your partner. 

5. Arrange a meeting with a financial planner 

Working with a financial planner could benefit you and your partner in many ways, from identifying potential tax breaks to setting out a plan to save for retirement. Yet, one perk you might overlook is how it could help you better manage your finances together.

Ongoing financial reviews as a couple mean that time is regularly set aside to talk about money, your goals, and financial concerns. It may mean you’re more likely to stick to your plan and provide an opportunity to update it if your circumstances change. 

A financial planner may also act as a useful third party who might help you unify different objectives. By working together with a financial planner, you may create a plan that gives both of you confidence about your financial future.  

If you’d like to create a financial plan with your partner, please get in touch to discuss how we could help you and arrange a meeting. 

Please note: This blog is for information purposes and does not constitute financial advice, which should be based on your individual circumstances The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Any advice or considerations are personal to each individual’s circumstances.

Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.  

Chancellor Jeremy Hunt could have more options ahead of March’s Budget as government borrowing halved at the end of 2023. With a general election looming, Hunt may take the opportunity to ease the tax burden. Read on to discover some of the personal finance changes that could be announced. 

Figures from the Office for National Statistics (ONS) show that government borrowing halved in December 2023. The lower deficit of £7.8 billion– the lowest month since 2019 – means the chancellor has more scope to implement tax cuts, increase public spending, or pay down debt. 

The annual Budget sets out the government’s proposals for changes to taxation. So, the announcements could affect your finances and long-term plan. Here are three changes the chancellor is reportedly contemplating. 

1. Cutting Income Tax

There’s speculation that changes to Income Tax could reduce the tax burden on households. It would follow National Insurance rates being cut for employed and self-employed workers in the Autumn Statement. 

While Income Tax rates haven’t increased in recent years, the thresholds have been frozen until April 2028. While your tax bill might not rise immediately, frozen thresholds could mean you pay more in the medium term or that you’re pushed into a higher tax bracket, even if your income hasn’t increased in real terms.

Indeed, the Office for Budget Responsibility (OBR) estimates that freezing the threshold for paying the higher- and additional rate of Income Tax will raise £42.9 billion by 2027/28.

Hunt has a few options if he wants to decrease the Income Tax burden before the general election. He could opt to increase the thresholds in line with inflation or reduce the tax rate.

2. Abolishing Inheritance Tax

Ahead of Hunt delivering the Autumn Statement in November 2023, it was reported he was mulling over abolishing Inheritance Tax (IHT).

IHT is a type of tax on the estate of someone who has passed away if the value of their estate exceeds certain thresholds. 

While only around 4% of estates are liable for IHT, it’s often referred to as “Britain’s most-hated tax” in the media.

The ONS data shows that between 2022 and 2023, IHT tax receipts were £7.1 billion. While that may seem like a large number, it represents just 0.28% of GDP. As a result, abolishing IHT could be viewed as a way to deliver a pre-election day boost with a relatively small reduction in the total tax collected. 

Alternatively, the chancellor could increase the thresholds for paying IHT or lower the tax rate. 

The thresholds for paying IHT have remained the same since 2020, and are currently frozen until April 2028. As they’re not rising in line with inflation, more estates are becoming liable for IHT as the value of assets, particularly property, may have increased. 

For the 2023/24 tax year:

• The nil-rate band is £325,000. If the entire value of your estate is below this threshold, no IHT is due.
• The residence nil-rate band is £175,000. Your estate may be able to use this allowance if you leave certain properties, including your main home, to direct descendants. 

The standard rate of IHT on the proportion of the estate that exceeds the thresholds is 40%. So, another option Hunt may consider is reducing the rate.

3. Increasing the ISA annual allowance

Again, there was speculation ahead of the Autumn Statement that the ISA annual allowance would increase. This didn’t materialise, but Hunt did announce key changes to simplify ISAs and make it easier for consumers to transfer their money.

ISAs offer a tax-efficient way to save or invest. In the 2023/24 tax year, you can add up to £20,000 to your ISA. The annual allowance has remained at this level since 2017 rather than rising at the same pace as inflation. 

Money saved or invested outside of an ISA could be liable for tax. As a result, raising the allowance may provide some people with a lower tax bill overall. 

The latest government figures show 11.8 million adults used their ISA to save or invest in the 2021/22 tax year. So, increasing the ISA allowance could be a savvy option before the public goes to the polls. 

We can help ensure your financial plan continues to reflect policies 

Keeping track of government policies and understanding what they mean for your financial plan can be difficult. As financial planners, we can help you keep your long-term plan up-to-date and explain when announcements might affect you.

If you have any questions about what the upcoming Budget may mean for you, please get in touch. 

Please note: This article is for general information only and does not constitute advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

The Financial Conduct Authority (FCA) does not regulate Inheritance tax planning or trust advice.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change. The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

The favourable tax treatment of ISAs may be subject to changes in legislation in the future.

If you haven’t used your ISA allowance for the 2023/24 tax year, it could be wise to review your options over the next few weeks before the 2024/25 tax year starts. Read on to discover some of the reasons why an ISA could make sense for you. 

Government statistics show that ISAs are a popular way to save and invest. Indeed, the latest data shows 11.8 million adult ISAs benefited from a deposit during the 2021/22 tax year (slightly down from 12.2 million in 2020/21). Collectively, ISA holders added around £66.9 billion to their accounts throughout the year. 

The media often dubs February and March “ISA season” as savers and investors are encouraged to deposit money into their ISAs before a new tax year starts on 6 April. Some ISA providers might also offer more attractive terms during this time, such as a higher interest rate, to entice potential customers. 

In the 2023/24 tax year, you can add up to £20,000 to an ISA. If you haven’t already used this allowance, here are four excellent reasons you might want to do so. 

1. A Cash ISA could be a tax-efficient way to save 

One of the reasons Cash ISAs make up an important part of many financial plans is that they’re tax-efficient – the interest paid on savings held in a Cash ISA is not liable for Income Tax. 

Many savers have welcomed rising interest rates over the last year, in respect of savings accounts. Yet, it could also mean you face an unexpected tax bill. 

According to the Telegraph, 2.7 million savers will pay tax on their savings in 2023/24 as a result of frozen thresholds and higher interest rates. The findings suggest that almost 1 million additional savers could face a tax bill on their savings when compared to just a year earlier. 

Around 1.4 million basic-rate taxpayers are expected to pay tax on their savings this year, a figure that has quadrupled in the last four years. 

According to MoneySavingExpert, if the interest your savings earn exceeds the Personal Savings Allowance (PSA), you might be liable for tax on the portion above the threshold. Your annual PSA depends on the rate of Income Tax you pay:

• Basic-rate taxpayers: £1,000
• Higher-rate taxpayers: £500
• Additional-rate taxpayers: £0

As additional-rate taxpayers don’t benefit from a PSA, an ISA could be a useful way to manage your tax bill. 

Even if you’re not an additional-rate taxpayer, the amount you can hold in your savings account before you could face a tax bill might be lower than you expect.

If your savings account had an interest rate of 5.22%, assuming the account balance was constant, you might need to pay tax if your savings exceed:

• £19,158 if you are a basic-rate taxpayer
• £17,242 if you are a higher-rate taxpayer.

So, placing your savings into a Cash ISA could reduce your potential tax liability. 

2. A Stocks and Shares ISA could help you invest efficiently 

Similarly, Stocks and Shares ISAs could also be tax-efficient if you want to invest. The returns your investments deliver when they’re held in a Stocks and Shares ISA are free from Capital Gains Tax (CGT).

Investments held outside of a Stocks and Shares ISA could be liable for CGT if they exceed the Annual Exempt Amount, which is £6,000 in the 2023/24 tax year for individuals. You should note the Annual Exempt Amount will halve to £3,000 for the 2024/25 tax year. 

The rate of CGT you pay depends on which tax band the gains fall into when added to your other income. In 2023/24:

• Higher- or additional-rate taxpayers have a CGT rate of 20% (28% for residential property)
• Basic-rate taxpayers may benefit from a lower CGT rate of 10% (18% for residential property) if the gains fall within the basic-rate Income Tax band.

According to the Financial Times, the latest HMRC figures show that a record £16.7 billion was collected through CGT in 2021/22. As the Annual Exempt Amount has fallen since then and will be cut again in 2024/25, it’s likely the amount collected through CGT will rise further. 

As a result, if you’re investing, doing so through a Stocks and Shares ISA could be efficient from a tax perspective. 

3. You’ll lose your ISA allowance if you don’t use it before the start of a new tax year  

An ISA could reduce your potential tax liability whether you want to save or invest. So, why should you review your ISA over the coming weeks? Simply, the allowance will reset when a new tax year starts.

If you don’t use the current tax year’s allowance before 6 April 2024, you’ll lose it, which could mean you overlook an opportunity to reduce your tax bill.

4. You could receive a government bonus with a Lifetime ISA

For some people, a Lifetime ISA (LISA) could prove a valuable way to save or invest as this differs to the usual ISA structure, as it benefits from a government bonus. 

You must be aged between 18 and 39 to open a LISA, although you can continue to contribute to a LISA until you’re 50. You can deposit a maximum of £4,000 each tax year into a LISA, and can choose between a Cash LISA and a Stocks and Shares LISA. 

Where a LISA is different to traditional ISAs is that deposits benefit from a 25% government bonus. So, if you deposit the annual maximum of £4,000 into a LISA, you’d receive £1,000 as a bonus. 

However, if you take money out of a LISA before you’re 60 for a purpose other than buying your first home, you’ll be charged 25% of the amount withdrawn. This means you’d lose the bonus and a portion of your own deposit, equivalent to a loss of just over 6%. 

Get in touch to talk about your ISA and long-term plans

If you have any questions about how to use the ISA annual allowance to support your financial plan, we’re here to help. Please contact us to arrange a meeting. 

Please note: This blog is for general information only and does not constitute advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change. 

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

The favourable tax treatment of ISAs may be subject to changes in legislation in the future.The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested.

An investment in a Stocks & Shares ISA will not provide the same security of capital associated with a Cash ISA.

Past performance is not a reliable indicator of future performance.